Overview
Portfolio managers manage investments on behalf of clients under an agreement, either on a discretionary or non-discretionary basis. They are regulated by SEBI under the SEBI (Portfolio Managers) Regulations, 2020.
Obligations include net worth requirements, client agreements and disclosure documents, segregation of client funds and securities, periodic reporting to clients and SEBI, and audit and certification requirements.
Who needs this service
• SEBI-registered Portfolio Managers
• Entities applying for PMS registration
Principal officers and compliance officers of PMS
Legal and regulatory framework
- SEBI (Portfolio Managers) Regulations, 2020
- SEBI Master Circular for Portfolio Managers
- Prevention of Money-laundering Act, 2002 and KYC norms
Scope of services
Registration support
- Review of eligibility, net worth and documentation
Compliance
- Compliance calendar and monitoring
- Review of client agreements and disclosure document
- KYC and AML process reviews
Reporting
- Periodic reports to SEBI
- Client statements and performance reporting review
- Fee and expense computation checks
Audit and certification
- Net worth certificates
- Internal audit of PMS operations
- Certificates required under the regulations
How the engagement works
- ReviewOperations, systems and existing compliance.
- CalendarObligations with owners and due dates.
- Periodic checksMonthly and quarterly reviews.
- ReportingCertificates and reports.
Documents typically required
SEBI registration and correspondenceClient agreements and disclosure documentClient-wise holdings and transaction recordsFee computationsNet worth computation
Key forms and due dates
| Item | Timeline |
|---|---|
| Reports to SEBI | Monthly, as prescribed |
| Client reporting | At least quarterly |
Deliverables
- Compliance reviews
- Net worth and other certificates
- Internal audit reports
The scope of each engagement is agreed in writing and depends on the nature, size and regulatory requirements of the entity.
Frequently asked questions
What is the minimum investment in PMS?
₹50 lakh per client, as prescribed by SEBI.
What net worth must a portfolio manager maintain?
₹5 crore, as prescribed under the 2020 regulations.
Can client funds be pooled?
No. Client funds and securities must be kept segregated in client-wise accounts.