
What Is SEBI Registered Portfolio Managers
Portfolio management encompasses the total holdings of securities and goods owned by an individual. It involves the service of managing a client's funds, known as Portfolio Management. Portfolio Managers are professionals entrusted with the responsibility of managing, advising, and overseeing a portfolio of securities, goods, or funds on behalf of clients. They bear a fiduciary duty and are expected to meet their client's needs by investing funds to achieve optimal returns, all while operating within the framework of the signed agreement.
Regulated by the SEBI (Portfolio Management) Regulations, 2020, the concept of a portfolio manager necessitates registration with SEBI to offer Portfolio Management Services.
No individual can function as a portfolio manager without obtaining a certificate of registration from the Securities and Exchange Board of India (SEBI) under the Portfolio Managers Regulations, 2020. The Sebi Registered Portfolio Management Services process entails the following steps:
- Application Submission to SEBI: An applicant must submit an application for a certificate to SEBI using Form A of Schedule I, along with a non-refundable application fee of Rs. One Lakh (Regulation 4(1)).
- Conditions & Qualifications: Portfolio managers must meet specific conditions and qualifications, including a minimum net worth of Rs. 5 Crores and possessing a degree in finance with at least 10 years of experience in the stock market.
- Acceptance or Rejection: Incomplete applications or those not adhering to specified instructions will be rejected (Regulation 5). However, applicants will be given an opportunity to rectify any issues pointed out by SEBI.
- Registration Fees: Upon approval, portfolio managers must pay a registration fee of Rs. Ten Lakhs to SEBI within fifteen days from the date of receipt of intimation (Regulation 10).
- Renewal Fee every 3 Years: Portfolio managers must pay a renewal fee of Rs. Five Lakhs every three years to maintain their registration.
Important SEBI Regulations:
- SEBI aims to enhance transparency and provide a fraud-free environment in the market. It mandates a minimum net worth of Rs. 5 Crores for portfolio managers.
- Detailed contracts between investors and portfolio managers must include all service particulars and fees charged.
- The minimum investment value has been raised to Rs. 50 Lakhs as per new SEBI regulations.
- Portfolio managers are required to provide clients with precise performance reports every three months or upon request.