NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager
Which of the following is a requirement for portfolio managers regarding client funds and securities under SEBI regulations?
Portfolio managers must keep client funds in a separate bank account distinct from their own funds. This segregation protects investors, and the manager cannot pool client money with its own, use it for its own obligations or lend client securities without consent.
- AClient funds must be kept in a separate bank account from the manager's own fundsCorrect
- BClient funds may be pooled with the manager's own funds for convenience
- CClient securities may be lent without client consent
- DClient funds may be used to meet the manager's own obligations
Explanation
The regulations require segregation of client money and securities from the portfolio manager's own, and each client's holdings must be kept separately. Pooling, using funds for own purposes or lending without consent would breach this safeguard.
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