n NISM Certifications
X NISM Series X
Medium

An investment adviser finds that the best PMS product is offered by a company where his spouse works. How should he proceed?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Drop the PMS product and not recommend it

  2. B

    Decline because it’s ineligible as per SEBI regulations

  3. C

    Recommend it without disclosure

  4. Make full disclosure to the client about his spouse’s employment and why the product is suitable

    Correct answer

Why this is the answer

Transparency and full disclosure are required to manage potential conflicts of interest.

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