According to proposed SEBI (Portfolio Managers) Regulations, 2019, the governing body had proposed to enhance the eligibility criteria and to define the role of Principal Officer clearly. The enhanced eligibility criterion is to be applicable to any employee with decision making authority relating to management of the clients' portfolios.
A Portfolio Manager is to mandatorily employ minimum one person with defined eligibility criteria in addition to Principal Officer and Compliance Officer. Net-worth requirement of Portfolio Managers is to be enhanced from INR 2 Crores to INR 5 Crores and the existing Portfolio Managers have to meet the enhanced requirement within 36 months.
Also, in a critical decision, the SEBI says that minimum investment by clients of Portfolio Managers is to be increased from INR 25 lakhs to INR 50 lakhs. Existing investments of clients may continue as such till end date of the PMS Agreement or as specified by the Board.
Discretionary Portfolio Managers to invest only in listed securities, money market instruments, units of Mutual Funds and such other securities/instruments as specified by SEBI from time to time.
SEBI says that Non-discretionary/ Advisory Portfolio Managers to invest not more than 25% of their AUM in unlisted securities. To make the appointment of custodian mandatory for all the Portfolio Managers except for those providing only advisory services to clients.
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