Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Role of Portfolio Managers

Under the SEBI (Portfolio Managers) Regulations, which of the following best describes a discretionary portfolio manager?

A discretionary portfolio manager takes investment decisions on the client's behalf, exercising sole and independent discretion within the terms of the agreement. The client's prior approval is not needed for each trade, unlike a non-discretionary service, where each decision needs client consent.

  1. AOne who exercises sole and independent investment discretion for the client's funds, as per the contractCorrect
  2. BOne who invests only after obtaining the client's prior approval for every transaction
  3. COne who only gives investment advice and never handles funds or securities
  4. DOne who manages only the portfolios of mutual fund unit holders

Explanation

A discretionary portfolio manager individually and independently manages the funds or securities of each client according to the portfolio management agreement. Option B describes a non-discretionary manager, who needs client consent for each decision. Option C describes an investment adviser, not a portfolio manager.

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.

Practise Role of Portfolio ManagersFree diagnostic mock

More Role of Portfolio Managers questions