Segregation of holdings
The requirement that each client's securities be held in separate accounts, and that all clients' funds be kept in a separate account maintained with a Scheduled Commercial Bank.
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
- Fiduciary capacityThe legal standing in which an investment adviser or portfolio manager must act — putting the client's interest ahead of its own and disclosing every conflict of interest as it arises.
- Fit and proper personThe character and record test in Schedule II of the SEBI (Intermediaries) Regulations, 2008 that an AIF's applicant, sponsor and manager must satisfy for registration and must keep satisfying afterwards.
- Hurdle rateThe minimum return that must accrue to investors before the manager earns any incentive fee — the threshold that turns a fund's profit into the manager's profit.
- Portfolio managerA body corporate registered with SEBI that, under a contract with a client, advises on or manages that client's securities or funds — discretionary, non-discretionary or advisory.
- Principal officerThe named individual at a non-individual intermediary who carries personal regulatory responsibility for the advisory business, and who must personally hold the prescribed qualification and NISM certification.
Where this is taught
Free preparation for NISM Series X-A← All terms