Explain what makes a portfolio discretionary for composite construction and, from a set of facts, judge whether a given portfolio is likely to qualify

A portfolio is discretionary when the firm can implement its intended strategy; client restrictions that stop it doing so make the portfolio non-discretionary. The firm must write down its definition and apply it consistently. Judge the facts by asking whether the restriction materially prevents the strategy. A client barring tobacco stocks from a broad equity mandate usually leaves the firm able to execute, so the portfolio stays discretionary or joins a composite with that restriction. A client who forbids selling a legacy holding forming a large part of the account, requires approval before each trade, or makes frequent unpredictable withdrawals usually blocks implementation, so the portfolio is non-discretionary. Such portfolios are excluded from composites but still counted in total firm assets.