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

Which entity is responsible for safekeeping the securities of PMS clients and settling trades, separate from the portfolio manager's own assets?

The custodian safekeeps PMS clients' securities and assists in settlement, keeping client assets segregated from the portfolio manager's own. Registrars maintain issuer records, rating agencies assess credit quality and exchange listing departments handle issuers, so they do not perform this function for PMS clients.

  1. ACustodianCorrect
  2. BRegistrar and transfer agent
  3. CCredit rating agency
  4. DStock exchange listing department

Explanation

The portfolio manager must appoint an independent custodian to hold clients' securities and funds in accounts kept apart from its own. The registrar handles issuer records, a rating agency assesses credit risk, and the listing department deals with listed companies, so none of them safekeeps PMS client assets.

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