About Portfolio Management Service:
- It is registered under the SEBI (Portfolio Managers) Regulations, 2020.
- It is a professional investment service where a qualified fund manager takes charge of the equity, debt and other securities portfolio of a customer — who is a high net-worth individual.
- Who can offer: Only corporate entities, companies or LLPs with SEBI registration can legally offer these services in India.
- Types of PMS:
- Discretionary PMS: In this type of PMS services, the portfolio manager has complete autonomy to make investment decisions on behalf of the investor.
- Non-Discretionary PMS: In non-discretionary PMS, the portfolio manager provides recommendations, but the final decision to buy or sell rests with the investors themselves.
- Advisory PMS: In Advisory PMS, the portfolio manager offers investment advice, and the investor executes transactions independently.
- Key regulations about PMS:
- Registration: All PMS providers must register with SEBI.
- Minimum Investment Requirement: SEBI mandates a ₹50 lakhs minimum investment, targeting high net worth investors capable of managing associated risks.
- Disclosure Obligations: PMS providers must regularly update investors with performance reports, fees, and risk disclosures.
- Custodian Engagement: An independent custodian is required to hold investor assets to eliminate conflicts of interest.
- Compliance Monitoring: Each PMS provider is required to appoint a compliance officer to ensure adherence to SEBI regulations.
