March 07, 2024
Overview
A Portfolio Manager is a body corporate that manages, advises, or administers a portfolio of securities or funds on behalf of clients. PMS can be discretionary or non-discretionary:
Type | Description |
Discretionary PMS | Independently manages funds according to the client’s needs. |
Non-Discretionary PMS | Manages funds based on directions provided by the client. |
Eligibility Criteria
To register as a Portfolio Manager, the applicant must meet the following conditions:
Criteria | Details |
Body Corporate | The applicant must be a registered entity. |
Infrastructure | Adequate office space, equipment, and manpower. |
Compliance Officer | Must appoint a qualified compliance officer. |
Principal Officer | Must be qualified in finance, accountancy, business management, law, or have relevant experience or certifications. |
Employee Qualifications | At least one employee with a graduate degree and 2 years of securities market experience. |
Net Worth | Minimum of ₹5 crore. |
Fit and Proper | Applicant must meet SEBI’s “fit and proper person” criteria. |
No Disciplinary Action | No adverse action under securities laws. |
Registration Process
Application Submission:
Fill Form A (available on SEBI’s website).
Pay a non-refundable application fee of ₹1,00,000 via demand draft to “Securities and Exchange Board of India” payable at Mumbai.
Review by SEBI:
SEBI examines the application.
Applicants may need to furnish clarifications or attend a personal representation.
Incomplete applications may be rejected after granting a 3-week rectification window.
Approval and Registration Fee:
Upon approval, pay ₹10,00,000 as the registration fee.
Receive the Certificate of Registration.
Certificate Validity:
Valid for 3 years.
Renewal application and ₹5,00,000 fee must be submitted 3 months before expiry.
Key Obligations
Obligation | Details |
Client Agreement | Enter into a written agreement outlining roles, responsibilities, and fees. |
Minimum Investment | Accept funds or securities worth at least ₹50 lakhs. |
Demat Account | Clients must open a demat account for investing in listed securities. |
Reporting | Provide periodic reports (at least semi-annual) on portfolio performance and transactions. |
Disclosure Document | Provide a document detailing fees, risks, and other terms at least 2 days before contract signing. |
Checklist for Application
Document/Information | Details |
Compliance and Principal Officer Details | Qualifications, PAN, and experience. |
Registered Office and Principal Business Address | Proof of address (rent agreement, utility bills, etc.). |
Incorporation Certificate | Certificate of incorporation or registration documents. |
Organizational Structure | Diagram showing functional activities and roles. |
Financial Documents | Audited financials, business plan (3 years), and net worth certificate from statutory auditor. |
Disclosure Document | Draft agreement and disclosures as per SEBI guidelines. |
Fees Overview
Fee Type | Amount (₹) | Description |
Application Fee | 1,00,000 | Paid during initial application submission. |
Registration Fee | 10,00,000 | Paid after SEBI approval for the grant of certificate. |
Renewal Fee | 5,00,000 | Paid for renewal of registration every 3 years. |
Disclaimer
This guide provides a general overview of the PMS registration process and related requirements. For the latest updates and detailed guidelines, please refer to SEBI's official website (www.sebi.gov.in). This information is not intended for legal purposes and should not be relied upon as legal advice.
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