Skip to content

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

Which statement about the ownership of securities in a PMS account is correct?

In PMS, securities are held in the individual client's own name in a separate demat account, not pooled. This lets each portfolio be customised and gives the client direct ownership, which differs from mutual funds where investors hold units of a common scheme.

  1. ASecurities are held in the portfolio manager's name as pooled assets
  2. BSecurities are held in the individual client's name in a separate demat accountCorrect
  3. CSecurities are held in the custodian's own name
  4. DSecurities are held in the name of the distributor

Explanation

Unlike mutual funds, PMS holds each client's securities separately, registered in the client's name, with a custodian as required for client assets. This gives direct ownership and customised portfolios. Pooling in the manager's, custodian's or distributor's name is not the PMS structure.

Did you get it right without looking?

One question tells you little. A timed set on Role of Portfolio Managers shows your real accuracy, how long you take and where you lose marks.

Practise Role of Portfolio ManagersFree diagnostic mock

More Role of Portfolio Managers questions