Skip to content

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

Which of the following statements about the risk profiling of a client by a SEBI-registered investment adviser is correct?

The adviser must assess each client's risk profile, document it, and ensure that advice given is suitable to that profile. It is not optional for experienced investors and has no investment size threshold. It also should be updated as client circumstances change.

  1. ARisk profiling is optional if the client is an experienced investor
  2. BThe adviser must assess the client's risk profile and ensure that the advice is suitable to it, and risk profile must be documentedCorrect
  3. CRisk profiling is required only for clients investing above a prescribed amount
  4. DA risk profile once assessed remains valid forever

Explanation

Regulations require a risk profile to be assessed for each client and for advice to be appropriate to it, with records maintained. It is not waived for experienced investors or based on a size threshold, and it should be reviewed rather than treated as permanent.

Did you get it right without looking?

One question tells you little. A timed set on Key Regulations shows your real accuracy, how long you take and where you lose marks.

Practise Key RegulationsFree diagnostic mock

More Key Regulations questions