📊 NISM Series XXI-A Chapter 8 of 12 ⚖ 13 of 100 marks weightage

Ch.8: Operational Aspects of Portfolio Managers

Practice questions for NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination, Chapter 8: Operational Aspects of Portfolio Managers. This chapter follows the PMS client relationship from start to finish. It covers who may invest, the disclosure document and internal dealing policies, the onboarding steps (KYC, application form, agreement, MITC, direct onboarding, joint holding), and the penalties a portfolio manager faces for violations. It closes with grievance redressal through SCORES and ODR, reporting to SEBI and FIU-IND, the permitted fees and charges (including high water mark and hurdle rate) and the periodic performance report. Carries 13 out of 100 marks. The exam has 100 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Which entities can invest in PMS, and what the two-part (static and dynamic) disclosure document must contain.
The written order-placement and allocation policies and the dealing-team controls, including automation for managers with ₹1,000 crore or more AUM.
The onboarding sequence: disclosure document, KYC with PAN, account opening form, agreement contents, MITC, direct onboarding and joint holding rules.
The penalties for contraventions, grievance redressal through SCORES and the three-stage ODR process, and disclosures to SEBI and FIU-IND.
PMS fee and expense rules (no upfront fee, 0.50% operating-expense cap, exit loads), how high water mark and hurdle rate limit performance fees, and the quarterly report with TWRR and XIRR.

Key Terms:Disclosure documentDealing team (DT)Most Important Terms and Conditions (MITC)Direct onboardingOnline Dispute Resolution (ODR)FIU-INDHigh water markHurdle rateTime Weighted Rate of Return (TWRR)Extended Internal Rate of Return (XIRR)

Free Sample Question

Q1MCQMediumPartnership and LLP

A partnership firm and a limited liability partnership (LLP) each want to open a PMS account. Which statement is correct?

ANeither is eligible; only individuals and HUFs may invest

✓Both are eligible, each subject to the ₹50 lakh minimum

COnly the partnership firm is eligible, since LLPs are body corporates

DOnly the LLP is eligible, since a firm lacks separate legal status

💡 The workbook's list of eligible investors includes both partnership firms and limited liability partnerships, along with trusts, AOPs and body corporates.

103 more questions in this chapter

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About this content: These practice questions are written by BullWiser from the syllabus of the NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination, using the workbook published by the National Institute of Securities Markets (NISM), Mumbai (September 2025 edition) as the fact source. NISM is a SEBI-established institution. Questions cover Chapter 8: Operational Aspects of Portfolio Managers with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or APMI. Last updated: September 30, 2026.

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← Ch.7: Role of Portfolio Managers Ch.9: Portfolio Management Process →