NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager
Which of the following is a feature of a portfolio manager's relationship with the client under the SEBI regulations?
The portfolio manager must keep clients' funds in a separate bank account, segregated from its own money. Pooling with own funds and assuring returns are prohibited under the SEBI regulations.
- AClient funds may be pooled with the manager's own funds for convenience
- BThe portfolio manager must keep client funds in a separate bank accountCorrect
- CThe portfolio manager may guarantee a fixed return to attract clients
- DThe portfolio manager may invest client funds in unlisted securities without disclosure
Explanation
Regulations require client funds to be kept in a separate bank account and client assets to be segregated from the manager's own. Guaranteeing returns or pooling with own funds is prohibited, and investments must be disclosed.
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