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. ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐๐๐ง๐๐ ๐๐ซ ๐๐๐๐ข๐ง๐ข๐ญ๐ข๐จ๐ง: 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. ๐๐๐ ๐ฎ๐ฅ๐๐ญ๐จ๐ซ๐ฒ ๐ ๐ซ๐๐ฆ๐๐ฐ๐จ๐ซ๐ค: 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. ๐๐จ๐ซ๐ค๐ข๐ง๐ ๐๐ซ๐จ๐ฎ๐ฉ ๐๐จ๐ซ ๐๐๐ฌ๐ ๐จ๐ ๐๐จ๐ข๐ง๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ: 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. ๐๐ฎ๐๐ฅ๐ข๐ ๐๐จ๐ง๐ฌ๐ฎ๐ฅ๐ญ๐๐ญ๐ข๐จ๐ง: SEBI has sought public comments by March 07, 2024, on the following issues:
a. ๐๐๐ ๐ข๐ฌ๐ญ๐ซ๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐๐ ๐๐ข๐ฌ๐ญ๐ซ๐ข๐๐ฎ๐ญ๐จ๐ซ๐ฌ: Consider making registration with the Association of Portfolio Managers in India mandatory for PMS distributors, aligning with industry practices in mutual funds.
b. ๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐ง๐๐จ๐๐ซ๐๐ข๐ง๐ : Propose measures to ease the digital onboarding process for clients, addressing challenges related to handwritten notes on fee annexures.
c. ๐๐จ๐ฌ๐ญ ๐๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ ๐๐๐ซ๐ฆ๐ฌ ๐๐ง๐ ๐๐จ๐ง๐๐ข๐ญ๐ข๐จ๐ง๐ฌ (๐๐๐๐): 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.