n NISM Certifications
XXI NISM Series XXI-A
Medium

In the context of Portfolio Management Services, what does a 'Soft Dollar' practice refer to?

Practice question from NISM XXI A for PMS - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Payment done in US Dollars for FPI trades executed by the broker for a PMS provider

  2. Paying more than the normal brokerage commission to access additional insights and infrastructure

    Correct answer

  3. C

    PMS dealing in US Dollars with overseas funds outside the USA

  4. D

    Buying and selling in overseas funds’ securities when USD volatility is low in Indian Forex markets

Why this is the answer

Soft dollar arrangements involve paying higher brokerage commissions in exchange for research, data, or other services from brokers, which are not directly charged but embedded in the commission.

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NISM XXI A for PMS - Mock Test 4