Economics · Economy
A Portfolio Manager operating under the Securities and Exchange Board of India (SEBI) (Portfolio Managers) Regulations, 2020, is managing the wealth of High Net-worth Individuals (HNIs). A client approaches the manager for a discretionary portfolio management service with an initial investment of 6,000,000 rupees. The manager intends to invest these funds in a mix of unlisted securities, listed equities, and money market instruments. Based on the regulatory framework, which of the following statements accurately describes the operational constraints for this Portfolio Manager regarding the client's funds and investment choices?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Under the discretionary model, the Portfolio Manager is not required to provide a performance report to the client more than once every two years unless specifically requested by the client in writing.
- 2The Portfolio Manager is allowed to pool the funds of multiple clients into a single bank account for administrative ease provided that the accounting for each client is maintained separately and audited quarterly.
- 3The Portfolio Manager must ensure that the investment in unlisted securities does not exceed 25 percent of the total portfolio value for a discretionary client, and the minimum investment amount per client remains 5,000,000 rupees.✓
- 4The Portfolio Manager can invest the entire 6,000,000 rupees in unlisted securities as long as the client provides a written consent form and the manager's net worth is above 20,000,000 rupees.
Correct answer
The Portfolio Manager must ensure that the investment in unlisted securities does not exceed 25 percent of the total portfolio value for a discretionary client, and the minimum investment amount per client remains 5,000,000 rupees.
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