NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager
Which statement best describes a non-discretionary portfolio management service under the SEBI regulations?
In a non-discretionary service, the portfolio manager takes investment decisions only after obtaining the client's prior consent for each transaction. The client retains the decision authority, unlike in discretionary PMS, where the manager exercises independent choice. Guaranteeing returns is not permitted in either.
- AThe manager decides investments independently without client consent
- BThe manager manages the portfolio only with the prior consent of the client for each transactionCorrect
- CThe manager invests only in unlisted securities
- DThe manager guarantees a minimum return to the client
Explanation
In non-discretionary PMS, the portfolio manager executes investment decisions only with the client's prior consent for each decision. Independent decisions describe discretionary services, and guaranteeing returns is prohibited.
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