How many questions come from Chapter 12 (Portfolio Manager) in the NISM Series X-A exam?

The workbook gives marks by module; shared over the module's chapters by length, this chapter is worth about 4 of the 150 marks, across MCQs and case studies.

Is there negative marking in NISM Series X-A?

Yes — 25% of the marks of a question is deducted for a wrong answer (0.25 on a 1-mark MCQ, 0.50 on a 2-mark case question), so leave a question blank when you cannot eliminate options.

Where can I practise NISM Series X-A Chapter 12 questions for free?

Aumsetu's free X-A mock test has an untimed chapter-wise practice mode with an explanation after every question, in English and Hindi, plus ten full-length timed mock tests.

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NISM Series X-A · Chapter 12: Portfolio Manager

पोर्टफोलियो मैनेजर · NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

~4 of 150 marks 90 MCQs + 9 case studies · 150 marks · 3 hours · 60% to pass · −25% of a question's marks per wrong answer 16 practice questions in our bank + 2 case studies

What this chapter covers

Portfolio management services in India: who may offer them, discretionary, non-discretionary and advisory services, SEBI registration requirements, a portfolio manager's responsibilities, fees (fixed, performance-linked, high-water mark, hurdle, catch-up), the direct access facility and performance disclosure.

पोर्टफोलियो मैनेजर — PMS के प्रकार, पंजीकरण, ज़िम्मेदारियाँ, शुल्क (हाई वॉटरमार्क, हर्डल रेट) और डायरेक्ट एक्सेस।

What to master before the exam

PMS is regulated by the SEBI (Portfolio Managers) Regulations, 2020 (the first PMS regulations came in 1993); only a SEBI-registered body corporate can offer it.
Discretionary (the manager decides), non-discretionary (the client decides, the manager executes) and advisory (the client decides and executes) services.
Registration needs a net worth of Rs 5 crore, a compliance officer and a principal officer with a finance-related qualification, at least 5 years' experience and NISM certification, plus one more employee with a degree and 2 years' experience.
Minimum Rs 50 lakh per client; at most 30% of a client's portfolio in associates or related parties (with one-time consent); no below-investment-grade securities; client funds held in a separate scheduled commercial bank account.
Fees: a fixed fee (e.g. 1%) plus profit sharing above a hurdle rate and only above the high-water mark; catch-up versus no catch-up; a direct access facility without distributors; performance reported using TWRR.

Exam tip: Part of Module 4 (23 marks). Know the numbers cold — Rs 50 lakh, Rs 5 crore, 30%, 5 years — and be able to work out a high-water-mark fee: no profit share until the portfolio crosses its previous peak.

Sample questions from this chapter

Five of the 16 questions in our free bank. Open the answer to see the explanation — every question in the mock test has one, in English and Hindi.

Question 1

Under the advisory model of PMS the execution has to be done by the _______

PMS के एडवाइज़री मॉडल में निष्पादन (execution) _______ द्वारा किया जाना होता है।

PMS fund managerPMS फंड मैनेजर
Clientक्लाइंट
Advisorएडवाइज़र
None of the aboveइनमें से कोई नहीं

Show answer & explanation

Answer: B — Client
In the advisory role the portfolio manager only gives non-binding investment advice; the investor takes the decisions and also executes the transactions. (Workbook sample question.)
एडवाइज़री भूमिका में पोर्टफोलियो मैनेजर केवल गैर-बाध्यकारी निवेश सलाह देता है; निर्णय निवेशक लेता है और लेन-देन भी स्वयं निष्पादित करता है। (वर्कबुक का नमूना प्रश्न।)

Question 2

The hurdle rate is the rate which has to be crossed in order to charge ________

हर्डल रेट वह दर है जिसे ________ वसूलने के लिए पार करना होता है।

Profit sharing feesप्रॉफिट शेयरिंग फीस
Depository chargesडिपॉज़िटरी शुल्क
Brokerageब्रोकरेज
Administration chargesप्रशासनिक शुल्क

Show answer & explanation

Answer: A — Profit sharing fees
The hurdle rate, mentioned in the PMS agreement, must be crossed before the PMS can charge extra (profit-sharing) fees; e.g., with an 8% hurdle there is no profit-sharing calculation until the return exceeds 8%. (Workbook sample question.)
PMS अनुबंध में उल्लिखित हर्डल रेट पार होने पर ही PMS अतिरिक्त (प्रॉफिट शेयरिंग) फीस ले सकता है; जैसे 8% हर्डल पर रिटर्न 8% से अधिक होने तक प्रॉफिट शेयरिंग की गणना नहीं होती। (वर्कबुक का नमूना प्रश्न।)

Question 3

Portfolio managers in India are currently registered and regulated under:

भारत में पोर्टफोलियो मैनेजर वर्तमान में किसके अंतर्गत पंजीकृत और विनियमित हैं?

SEBI (Portfolio Managers) Regulations, 1993SEBI (पोर्टफोलियो मैनेजर) विनियम, 1993
SEBI (Portfolio Managers) Regulations, 2020SEBI (पोर्टफोलियो मैनेजर) विनियम, 2020
SEBI (Mutual Funds) Regulations, 1996SEBI (म्यूचुअल फंड) विनियम, 1996
SEBI (Investment Advisers) Regulations, 2013SEBI (निवेश सलाहकार) विनियम, 2013

Show answer & explanation

Answer: B — SEBI (Portfolio Managers) Regulations, 2020
Portfolio managers are registered and regulated under the SEBI (Portfolio Managers) Regulations, 2020; the first regulations were issued in January 1993.
पोर्टफोलियो मैनेजर SEBI (Portfolio Managers) Regulations, 2020 के अंतर्गत पंजीकृत और विनियमित हैं; पहले विनियम जनवरी 1993 में जारी हुए थे।

Question 4

What does the workbook highlight about the SEBI (Portfolio Managers) Regulations, 1993?

वर्कबुक SEBI (Portfolio Managers) Regulations, 1993 के बारे में क्या रेखांकित करती है?

They marked the beginning of PMS in January 1993 and came even before the mutual fund regulationsइनसे जनवरी 1993 में PMS की शुरुआत हुई और ये म्यूचुअल फंड विनियमों से भी पहले आए
They were issued after the AIF regulationsये AIF विनियमों के बाद जारी हुए
They allowed individuals to act as portfolio managers without registrationइनसे व्यक्तियों को बिना पंजीकरण पोर्टफोलियो मैनेजर बनने की अनुमति मिली
They were issued by the RBIये RBI द्वारा जारी किए गए थे

Show answer & explanation

Answer: A — They marked the beginning of PMS in January 1993 and came even before the mutual fund regulations
January 1993 marked the beginning of PMS when SEBI issued the Portfolio Managers Regulations, 1993 — among the first regulations, issued even before the mutual fund regulations.
जनवरी 1993 में SEBI द्वारा Portfolio Managers Regulations, 1993 जारी करने से PMS की शुरुआत हुई — ये पहले विनियमों में से थे, जो म्यूचुअल फंड विनियमों से भी पहले आए।

Question 5

Under the SEBI regulations, a portfolio manager must be a:

SEBI विनियमों के अनुसार पोर्टफोलियो मैनेजर होना चाहिए:

Individual with a finance degreeवित्त की डिग्री वाला व्यक्ति
Hindu Undivided Familyहिंदू अविभाजित परिवार (HUF)
Body corporateबॉडी कॉरपोरेट (निगमित निकाय)
Partnership of any two investment advisersकिन्हीं दो निवेश सलाहकारों की साझेदारी

Show answer & explanation

Answer: C — Body corporate
A portfolio manager is a body corporate which, under a contract with a client, advises, directs or undertakes management of the client’s portfolio; SEBI checks that the applicant is a body corporate before registration.
पोर्टफोलियो मैनेजर एक बॉडी कॉरपोरेट है जो क्लाइंट के साथ अनुबंध के तहत उसके पोर्टफोलियो का प्रबंधन करता है; पंजीकरण से पहले SEBI जाँचता है कि आवेदक बॉडी कॉरपोरेट है।

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All X-A chapters

1. Introduction to Personal Financial Planning · 7 marks 2. Time Value of Money · 7 marks 3. Evaluating the Financial Position of Clients · 10 marks 4. Debt Management and Loans · 13 marks 5. Introduction to the Indian Financial Markets · 4 marks 6. Securities Market Segments · 6 marks 7. Introduction to Investment · 3 marks 8. Investing in Stocks · 8 marks 9. Investing in Fixed Income Securities · 13 marks 10. Understanding Derivatives · 6 marks 11. Mutual Funds · 14 marks 12. Portfolio Manager · 4 marks 13. Overview of Alternative Investment Funds (AIFs) · 5 marks 14. Introduction to Modern Portfolio Theory · 3 marks 15. Portfolio Construction Process · 7 marks 16. Portfolio Performance Measurement and Evaluation · 10 marks 17. Operational Aspects of Investment Management · 13 marks 18. Key Regulations · 10 marks 19. Ethical Issues · 3 marks 20. Grievance Redress Mechanism · 4 marks

← Chapter 11: Mutual Funds Chapter 13: Overview of Alternative Investment Funds (AIFs) →

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