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

Which statement about the periodic reporting a portfolio manager must give to PMS clients is correct under SEBI rules?

Portfolio managers must send clients regular periodic reports, at least quarterly, showing portfolio holdings, transactions, expenses and fees charged. This is a mandatory duty under SEBI rules, not something done only on request or only when the portfolio loses value.

  1. AReports need only be given when the client asks
  2. BClients must receive periodic reports, at least quarterly, covering portfolio holdings, transactions and feesCorrect
  3. CReports are required only if the portfolio makes a loss
  4. DReports go to SEBI only and not to the client

Explanation

SEBI's regulations require portfolio managers to furnish clients with periodic reports, at intervals not exceeding six months by the older text and in practice at least quarterly as specified in current rules, covering holdings, transactions, expenses and fees. Reporting is not optional or limited to loss-making cases.

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