Structured Biiz

PORTFOLIO MANAGERS

Portfolio means the total holdings of securities and goods belonging to any person. The service provided for managing the funds of a client is called Portfolio Management. Portfolio Managers are the professionals who are responsible for managing, advising and supervising a portfolio of securities or goods or funds of the client. The Portfolio Manager holds a fiduciary duty and is expected to be capable for satisfying the needs of its client by investing the fund with the optimum return. Portfolio managers must act within the framework of the agreement signed. 

The concept of a portfolio manager is governed by the provisions of SEBI (Portfolio Management) Regulations, 2020. 

The Portfolio Manager is required to be registered with the SEBI for offering Portfolio Management Services.

Why creating a portfolio is beneficial?

Types of Portfolio Management Services

Discretionary Portfolio Management

Non – Discretionary Portfolio Management

Net Worth Requirement & Pre-requisites

Registration Process

No person shall act as a Portfolio Manager unless it has obtained a Certificate of Registration from the Board under Securities And Exchange Board Of India (Portfolio Managers) Regulations, 2020.

Person has to make an application for the grant of a certificate to the Board (SEBI) in Form A of Schedule I and shall be accompanied by a non-refundable application fee of Rs. One Lakh. (Regulation 4(1))

  • The minimum net worth requirement for being a Portfolio Manager is Rs. 5 Crores, which was earlier Rs. 2 Crores.
  • The important condition is that an applicant must have a degree in finance and should have 10 years of experience in the stock market.

Any application, which  is  not complete in all respects and does not conform to the instructions specified in the form, shall be rejected (Regulation 5):

Provided that, before rejecting any such application, the applicant shall be given an opportunity to remove objections indicated by the Board, within the time specified, not later than 3 weeks.

Once the application is approved, every portfolio manager shall pay a sum of Rs. 10 Lakhs (Rupees Ten Lakhs) as registration fees at the time of the grant of certificate by the Board.

The fee shall be paid by the portfolio manager within 15 (fifteen) days from the date of receipt of intimation from the Board under regulation 10.

A  Portfolio  Manager  who  has  been  granted  a  Certificate  of  Registration, to keep its registration in force, shall pay a fee of Rs. 5 Lakh (Rupees Five Lakh) every 3 (Three) years, from the date of grant  of  certificate  of  registration  or  from  the  date  of  grant  of  certificate  of  registration granted prior to the commencement of the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016, as the  case  may  be,  within  three months  before  expiry  of  the  block  period  for  which fee  has been paid.

Responsibilities of the Portfolio Managers

Liability for action in case of default

A Portfolio Manager who contravenes any of the provisions of the Act, rules or regulations framed  there under  shall  be  liable  for  one  or  more  actions  specified  therein  including  the  action under  Chapter  V  of  the  Securities  and  Exchange  Board  of India  (Intermediaries)  Regulations, 2008.

Under the said regulations, SEBI may appoint a Designated Authority for inspection and investigation of the alleged offence. After careful investigation and inspection, the Designated Authority may take the following measures: