Sebi directs PMS providers to share commission details with clients

Experts say directive will help clients understand product being offered is for commissions or merit

The Securities and Exchange Board of India has directed portfolio management service (PMS) providers to disclose to clients the commission payouts they made to distributors.

Experts say this will bring in more transparency. “From the perspective of clients, it will give them clarity whether the product being sold to them by an advisor or distributor is because of the high commissi­ons or on the product’s merit,” said Kamal Manocha, CEO, PMS AIF World.   

As part of the frequently asked questions (FAQs), the market regulator said that PMS players will need to share “details of commission paid to distributor(s) for the particular