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

Which of the following is a requirement for the funds and securities of PMS clients under the SEBI portfolio manager rules?

Client funds and securities must be kept in separate client-wise accounts, segregated from the portfolio manager's own money. Pooling assets with the manager's funds or in one common account is not permitted, and distributors do not hold client assets.

  1. AThey may be pooled with the portfolio manager's own funds for operational ease
  2. BThey must be kept in separate client-wise accounts, distinct from the portfolio manager's own accountsCorrect
  3. CThey may be held in a single common bank account for all clients
  4. DThey must be held by the distributor on behalf of the client

Explanation

Portfolio managers must keep each client's funds and securities separately in client-wise accounts and segregate them from their own. Pooling with own funds or a common account violates this requirement. Distributors do not hold client assets.

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