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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Key Regulations

Which of the following is an obligation of an investment adviser regarding conflict of interest under the SEBI (Investment Advisers) Regulations, 2013?

An investment adviser must identify and avoid conflicts of interest where possible and disclose any that remain to the client in writing, so that the advice is not affected. The duty does not depend on the client asking or on the advice proving profitable.

  1. ADisclose to the client, in writing, any conflict of interest and avoid it where possibleCorrect
  2. BConflicts need be disclosed only to SEBI
  3. CConflicts need not be disclosed if the advice proves profitable
  4. DConflicts need be disclosed only when the client asks

Explanation

Advisers must act in the client's interest, and must disclose any actual or potential conflict of interest to the client and not let it affect advice. Disclosure is not dependent on a client request, on profitability, or limited to the regulator.

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