In line with the FY 2023-24 budget’s commitment to simplify compliance processes in the financial sector, Finance Minister Smt. Nirmala Sitharamanannounced initiatives to streamline operations for various stakeholders through a consultative approach.
Key Points:
1. 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐌𝐚𝐧𝐚𝐠𝐞𝐫 𝐃𝐞𝐟𝐢𝐧𝐢𝐭𝐢𝐨𝐧: A portfolio manager, as per the contract or arrangement with a client, manages or administers a portfolio of securities or client funds, either as a discretionary portfolio manager or otherwise, for clients investing Rs. 50 lakh and above.
2. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤: SEBI-registered portfolio managers currently operate under the SEBI (Portfolio Managers) Regulations, 2020, and related circulars, including the Master Circular dated March 20, 2023. India has over 400 SEBI-registered PMS entities.
3. 𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐆𝐫𝐨𝐮𝐩 𝐟𝐨𝐫 𝐄𝐚𝐬𝐞 𝐨𝐟 𝐃𝐨𝐢𝐧𝐠 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬: SEBI has formed various working groups to align regulatory processes with the budget announcement. The Ease of Doing Business working group specifically focuses on reviewing the existing framework under PMS Regulations to enhance the ease of doing business for Portfolio Managers.
4. 𝐏𝐮𝐛𝐥𝐢𝐜 𝐂𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧: SEBI has sought public comments by March 07, 2024, on the following issues:
a. 𝐑𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐏𝐌𝐒 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐨𝐫𝐬: Consider making registration with the Association of Portfolio Managers in India mandatory for PMS distributors, aligning with industry practices in mutual funds.
b. 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐎𝐧𝐛𝐨𝐚𝐫𝐝𝐢𝐧𝐠: Propose measures to ease the digital onboarding process for clients, addressing challenges related to handwritten notes on fee annexures.
c. 𝐌𝐨𝐬𝐭 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐓𝐞𝐫𝐦𝐬 𝐚𝐧𝐝 𝐂𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬 (𝐌𝐈𝐓𝐂): Introduce a standard document titled “Most Important Terms and Conditions” (MITC) to enhance client understanding of crucial aspects of the PMS-client relationship.
A copy of the SEBI Consultation paper is enclosed herewith.
Our clients have shared their initial perspectives for representation to SEBI, and we invite stakeholders to offer valuable insights, collaborating with Regstreet Law Advisors to enhance the regulatory landscape for Portfolio Managers at info@regstreetlaw.com.