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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

Which of the following is a recommended operational practice for an investment adviser regarding client records under the SEBI (Investment Advisers) Regulations, 2013?

Advisers must maintain records of advice and client risk profiles and make them available for inspection by SEBI. Records cannot be discarded when the relationship ends, kept only for the latest advice, or limited to clients on a particular fee model.

  1. ARecords may be discarded once the advisory relationship ends
  2. BRecords need be kept only for the client's most recent recommendation
  3. CRecords are kept only for clients who pay performance-based fees
  4. DRecords of advice and client risk profiles must be maintained and be available for inspectionCorrect

Explanation

Investment advisers must maintain documentation such as risk profiling, suitability assessment and advice records for the period prescribed, and make them available to SEBI on inspection. They cannot discard records on ending the relationship or keep only the latest recommendation. The requirement is not limited to particular fee models.

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