NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Role of Portfolio Managers
In a discretionary portfolio management service, who takes the investment decisions for the client's portfolio?
The portfolio manager decides in a discretionary PMS. The manager has the authority to invest and manage the client's funds or securities independently, within the terms of the portfolio management agreement. The client does not approve individual trades, which is the feature of non-discretionary services.
- AThe portfolio manager, at its sole discretion, in line with the agreementCorrect
- BThe client, who approves each trade before execution
- CThe distributor who introduced the client
- DThe custodian holding the client's securities
Explanation
In the discretionary service, the portfolio manager exercises independent discretion over investment and management of the client's funds or securities, subject to the portfolio management agreement. In the non-discretionary service the client must approve decisions. Distributors and custodians do not take investment decisions.
Did you get it right without looking?
One question tells you little. A timed set on Role of Portfolio Managers shows your real accuracy, how long you take and where you lose marks.
More Role of Portfolio Managers questions
- Under the SEBI (Portfolio Managers) Regulations, 2020, what is the minimum investment amount a client must bring in when opening a PMS accou…
- In the context of portfolio management services in India, which of the following best describes a discretionary portfolio manager?
- In a PMS, the fee structure under which the manager charges a fee only when the portfolio return exceeds an agreed minimum return is called:
- Which statement about the PMS agreement between a portfolio manager and a client is consistent with SEBI's PMS regulations?
- A discretionary portfolio manager is distinguished from a non-discretionary portfolio manager mainly because the discretionary manager:
- Which fee structure is NOT permitted to be charged by a portfolio manager to PMS clients under SEBI norms?