NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Role of Portfolio Managers
Under the SEBI (Portfolio Managers) Regulations, 2020, in which type of PMS does the portfolio manager exercise investment discretion over the client's funds or securities as per the agreement?
Discretionary portfolio management is the type in which the portfolio manager independently decides and executes investments for the client within the terms of the agreement. Non-discretionary and advisory services require client consent or action for each transaction, so they do not involve investment discretion.
- ADiscretionary portfolio managementCorrect
- BNon-discretionary portfolio management
- CAdvisory portfolio management
- DExecution-only portfolio management
Explanation
In discretionary PMS the portfolio manager takes investment decisions independently on the client's behalf, as per the agreement. In non-discretionary PMS the manager needs the client's consent for each decision. Advisory PMS only advises and the client executes.
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