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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 typical feature of a PMS client's periodic reporting by the portfolio manager?

Portfolio managers must give clients periodic reports covering holdings, transactions, performance and the fees and expenses charged. This transparency lets clients judge net outcomes. Reporting only on request or hiding brokerage and expenses would not meet the regulatory disclosure expectations.

  1. AReports are given only when the client asks for them
  2. BClient receives periodic reports covering portfolio holdings, transactions, and performance, with fees and expenses disclosedCorrect
  3. CReports are limited to the manager's other clients' average returns
  4. DReports exclude brokerage and expenses charged to the portfolio

Explanation

SEBI rules require portfolio managers to furnish regular client reports on holdings, transactions, performance, fees and expenses. Ad hoc-only reporting or omitting charges would defeat transparency to the client.

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