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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager

Which statement about a non-discretionary portfolio manager is correct under the SEBI (Portfolio Managers) Regulations?

A non-discretionary portfolio manager acts only on the client's prior consent or directions for each transaction. Independent decision-making is the hallmark of discretionary services, and fees are permitted in both types.

  1. AIt decides the investments independently without client consent
  2. BIt manages the funds only in the form of mutual fund units
  3. CIt exercises investment decisions only with the prior consent of the client for each transactionCorrect
  4. DIt cannot charge any fee to the client

Explanation

In non-discretionary services, the portfolio manager manages the funds in accordance with the directions of the client, so each investment decision needs client consent. Independent decisions are the feature of discretionary services. Fees may be charged.

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