MASTER CIRCULAR
SEBI/HO/IMD/IMD-POD-1/P/CIR/2024/80 June 07, 2024
To,
All Portfolio Managers
Association of Portfolio Managers in India (‘APMI’)
Sir / Madam,
Subject: Master Circular for Portfolio Managers
A. For effective regulation of Portfolio Managers, the Securities and Exchange
Board of India (“SEBI”) has been issuing various circulars from time to time. In
order to enable the stakeholders to have an access to all the applicable
requirements at one place, the provisions of the said circulars issued till
November 30, 2022 were incorporated in the Master Circular for Portfolio
Managers dated March 20, 2023.
B. Subsequently, various guidelines/directions were issued to Portfolio Managers
by way of circulars/letters. In view of the same, the Master Circular dated March
20, 2023 has been updated to include all relevant circulars that were issued
on/before March 31, 2024. The instant Master Circular supersedes the Master
Circular for Portfolio Managers dated March 20, 2023.
C. Vide Master Circular for Portfolio Managers dated March 20, 2023, the
guidelines/directions contained in the circulars listed out in the Annexure Z
to that Master Circular were rescinded. In addition, with the issuance of this
Master Circular, the guidelines/directions contained in the circulars listed out at
Sr. Nos.33-36 in the Appendix to this Master Circular, to the extent they relate
to the Portfolio Managers, shall stand rescinded.
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D. With respect to the directions or other guidance issued by SEBI, as specifically
applicable to Portfolio Managers, the same shall continue to remain in force in
addition to the provisions of any other law for the time being in force. Terms not
defined in this Master Circular shall have the same meaning as provided under
the relevant Regulations.
E. Notwithstanding such rescission,
E.1. anything done or any action taken or purported to have been done or taken
under the rescinded circulars, including registrations or approvals granted,
fees collected, registration suspended or cancelled, any inspection or
investigation or enquiry or adjudication commenced or show cause notice
issued prior to such rescission, shall be deemed to have been done or taken
under the corresponding provisions of this Master Circular;
E.2. any application made to SEBI under the rescinded circulars, prior to such
rescission, and pending before it shall be deemed to have been made under
the corresponding provisions of this Master Circular;
E.3. the previous operation of the rescinded circulars or anything duly done or
suffered thereunder, any right, privilege, obligation or liability acquired,
accrued or incurred under the rescinded circulars, any penalty, incurred in
respect of any violation committed against the rescinded circulars, or any
investigation, legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as
if the rescinded circulars have never been rescinded;
F. Pursuant to issuance of this Master Circular, the entities which are required to
ensure compliance with various provisions shall submit necessary reports as
envisaged in this Master Circular on a periodic/ continuous basis.
G. This Master Circular is issued in exercise of powers conferred under Section
11(1) of the Securities and Exchange Board of India Act, 1992 to protect the
interests of investors in securities and to promote the development of, and to
regulate the securities market.
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H. This Master Circular is available on the SEBI website at https://www.sebi.gov.in/
under the category “Legal -> Master Circulars”.
Yours faithfully,
Peter Mardi
Deputy General Manager
Investment Management Department
Tel: 022 - 26449233
Email: peterm@sebi.gov.in
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TABLE OF CONTENTS
ABBREVIATIONS ....................................................................................................................... 7
1. REGISTRATION AND POST-REGISTRATION ACTIVITY ......................................... 8
1.1. Application procedure for registration as Portfolio Manager ...................... 8
1.2. General Registration Guidelines .......................................................................... 8
1.3. Clarification for Same Group Entities ................................................................. 9
1.4. Co-investment Portfolio Management Services ............................................ 11
1.5. Procedure for seeking prior approval for change in control of SEBI
registered Portfolio Managers ......................................................................................... 12
1.6. Format of Net worth calculation ......................................................................... 14
1.7. Certificate of associated persons in the Securities Markets ...................... 15
2. OPERATING GUIDELINES ............................................................................................ 18
2.1. Guidelines for advertisement by Portfolio Managers ................................... 18
2.2. Maintenance of Clients’ Funds in a separate Bank Account by Portfolio
Managers ................................................................................................................................ 18
2.3. Direct on-boarding of clients by Portfolio Managers ................................... 19
2.4. Supervision of Distributors ................................................................................. 20
2.5. Clarification on minimum investment amount by clients and schemes 21
2.6. Written down policies by Portfolio Manager................................................... 21
2.7. Fair and equitable treatment of all clients ....................................................... 22
2.8. Cyber Security and Cyber Resilience framework for Portfolio
Managers ................................................................................................................................ 24
2.9. Valuation of Securities by Portfolio Managers............................................... 25
3. INVESTMENTS BY PORTFOLIO MANAGERS ......................................................... 27
3.1. Transaction in Corporate Bonds through Request for Quote platform by
Portfolio Management Services (PMS)........................................................................... 27
3.2. Investment in Derivatives .................................................................................... 28
3.3. Participation of Portfolio Managers in Commodity Derivatives Market
in India ................................................................................................................................... 29
3.4. Limits on investment in securities of associates/ related parties of
Portfolio Managers .............................................................................................................. 31
3.5. Prior consent of the client regarding investments in the securities of
associates/related parties.................................................................................................. 32
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3.6. Minimum credit rating of securities for investments by Portfolio
Managers ............................................................................................................................... 34
3.7. Applicability of above provisions: ..................................................................... 35
4. DISCLOSURE REQUIREMENTS .................................................................................. 37
4.1. Material change in Disclosure Document ........................................................ 37
4.2. Clause in Disclosure Document/ Client agreement/ Power of attorney .. 37
4.3. Disclosure of fees and charges.......................................................................... 38
4.4. Publishing of Investor Charter by Portfolio Managers on their
websites ................................................................................................................................. 38
4.5. Performance Disclosure by Portfolio Managers ............................................ 39
4.6. Nomenclature ‘Investment Approach’ .............................................................. 41
4.6A. Performance Benchmarking .................................................................................. 42
4.7. Disclosure of details of related party investments by Portfolio
Managers ............................................................................................................................... 43
5. REPORTING REQUIREMENTS .................................................................................... 45
5.1. Submission of monthly report by Portfolio Managers ................................. 45
5.2. Submission of compliance reports by Portfolio Manager .......................... 46
5.3. Firm-level performance reporting by Portfolio Managers ........................... 47
5.4. Offsite Inspection data reporting to SEBI ........................................................ 49
5.5. Reporting to clients by Portfolio Managers .................................................... 51
5.6. Reporting of Performance to Clients ................................................................ 51
6. FEES AND CHARGES .................................................................................................... 55
6.1. Regulation of Fees and Charges ........................................................................ 55
7. GRIEVANCE REDRESSAL ............................................................................................ 59
7.1. Dispute Resolution ................................................................................................ 59
7.2. Disclosure of Investor Complaints by Portfolio Managers on their
websites ................................................................................................................................. 59
ANNEXURES ............................................................................................................................. 60
Annexure 1A: Online Processing of Portfolio Manager Applications ................... 61
Annexure 2A: Guidelines for Advertisements by Registered Portfolio
Managers ................................................................................................................................ 63
Annexure 2B: Code of Conduct for Distributors of Portfolio Management
Services .................................................................................................................................. 65
Annexure 2C: Cyber Security and Cyber Resilience framework ............................ 67
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Annexure 3A: Format of obtaining the consent from the client .............................. 80
Annexure 4A: Illustration for Annexure on Fees and Charges................................ 83
Annexure 4B: Format of Investor Charter in Respect of Portfolio Management
Services .................................................................................................................................. 86
Annexure 4C: Format for disclosure of Performance of the Portfolio Manager . 96
Annexure 5A: Format for Monthly Report to SEBI ...................................................... 97
Annexure 5B: Offsite Inspection Reporting Formats ............................................... 103
Annexure 5C: Details of reporting requirements as per the provisions of the
Master Circular ................................................................................................................... 139
Annexure 5D: Format of Quarterly Reporting to Client ........................................... 141
Annexure 7A: Format of Complaint data to be displayed by the Portfolio
Managers .............................................................................................................................. 148
APPENDIX: LIST OF CIRCULARS RESCINDED ................................................................. 150
POLICY RELATED LETTERS/EMAILS ISSUED BY SEBI........................................... 154
1. Performance benchmarking of Portfolio Managers ............................................ 154
2. Reply to your queries raised for the matter pertaining to Performance
Benchmarking of Portfolio Managers .............................................................................. 157
3. Formats for annual submissions by Portfolio Managers- Proposal on the
Formats .................................................................................................................................... 160
4. Clarification regarding Clause 2.6 and 2.7 of SEBI Master Circular for Portfolio
Managers .................................................................................................................................. 166
5. Provision for Submission of Compliance Reports of PMS through the SEBI
Intermediary Portal ................................................................................................................ 168
APMI Guidelines/Circulars----------------------------------------------------- Refer APMI Website
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ABBREVIATIONS
Alternative Investment Fund AIF
Assets under Management AUM
Association of Mutual Funds in India AMFI
AMFI Registration Number ARN
Bombay Stock Exchange BSE
Chartered Accountant CA
Company Secretary CS
Corporate Bonds CBs
Dealing Team DT
Financial Year FY
Foreign Portfolio Investor FPI
Investment Approach IA
Know Your Client KYC
National Company Law Tribunal NCLT
National Institute of Securities Markets NISM
One-to-many OTM
One-to-one OTO
Portfolio Management Services PMS
Portfolio Manager PM
Request for Quote platform of stock exchanges RFQ
SEBI (Portfolio Managers) Regulations 2020 the PM Regulations
SEBI Complaints Redress System SCORES
Securities and Exchange Board of India SEBI
Terms of Reference TOR
Time Weighted Rate of Return TWRR
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1. REGISTRATION AND POST-REGISTRATION ACTIVITY
1.1. Application procedure for registration as Portfolio Manager1
1.1.1. All entities desirous to be registered as Portfolio Manager, are required to
file an online application on SEBI Intermediary Portal
(https://siportal.sebi.gov.in)2.
1.1.2. An applicant is required to furnish the application in Form A as specified
in the Securities and Exchange Board of India (Portfolio Managers)
Regulations, 2020 (“PM Regulations”), to SEBI for registration as a
Portfolio Manager. On receipt of ‘Form A’, SEBI may seek further
information for processing the application. Any information sought by SEBI
has to be responded in detail and supported by relevant documents.
1.1.3. The information submitted to SEBI at the time of registration, shall be full
and complete in all respects, otherwise it may delay processing of the
registration application.
1.1.4. Online process for Fresh Registrations and Updation of Information is
given in Annexure 1A of this Master Circular3.
1.2. General Registration Guidelines4
1.2.1. The registration granted to a portfolio manager under Chapter II of the PM
Regulations is for the principal office as well as for all the branch offices
of the portfolio manager in India.
1 SEBI/RPM CIRCULAR NO.2 (2002-2003) dated January 14, 2003
2 SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 02, 2017
3 Online Process of Portfolio Manager applications dated September 21, 2010
4 RPM circular No.1(93-94) dated October 20, 1993
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1.2.2. The portfolio manager shall mention its registration number contained in
the certificate of registration in all the correspondence with SEBI, other
authorities, Stock Exchanges and the clients of the portfolio manager.
1.2.3. With a view to ensuring that all Rules, Regulations, Guidelines,
Notifications etc. issued by SEBI, the Government of India and other
regulatory authorities are complied with, the Portfolio Manager shall
designate a senior officer as compliance Officer, who shall co-ordinate
with regulatory authorities in various matters and provide necessary
guidance as also ensure compliance internally. The Compliance Officer
shall inter alia ensure that the observations made / the deficiencies pointed
out by SEBI in the functioning of the portfolio managers do not recur.
1.2.4. Correspondence relating to registration and clarifications on Guidelines /
Circulars issued by SEBI shall be made only by the principal office of the
portfolio manager and not by any of its branch offices.
1.2.5. The portfolio managers shall have a code of conduct as envisaged under
the Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015.
1.3. Clarification for Same Group Entities5
1.3.1. SEBI may consider grant of certificate to an applicant, notwithstanding that
another entity in the same group has been previously granted registration
by SEBI, if the following conditions are fulfilled:
1.3.1.1. The entities are incorporated as separate legal entities.
5 SEBI RPM CIRCULAR NO.1 (2002-2003) dated September 17, 2002
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1.3.1.2. The entities have independent Board of Directors.
Explanation: Independent Board of Directors for this purpose means
that common directors should not be in majority in both the Boards.
1.3.1.3. There is arm’s length relationship with reference to their operations.
1.3.1.4. The key personnel and infrastructure are independently available for
each entity.
1.3.1.5. Each entity has independent regulatory control and supervisory
mechanism.
1.3.2. It is also clarified that whenever as per the above policy, two entities in the
same group are granted registration, any action by way of suspension or
cancellation of registration taken by SEBI against one entity, may entail
action against other entities of the same group, under the Intermediaries
Regulations.
Explanation: For the purposes of this Master Circular, two entities are
considered to be in the same group if:
1.3.2.1. the same person, by himself or in combination with relatives, directly
or indirectly exercises control over both the entities or,
1.3.2.2. one is an ‘associate company’ of another and for this purpose,
‘associate company’ shall mean ‘associate company’ as defined under
sub-section (6) of section 2 of the Companies Act,2013, or
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1.3.2.3. where one entity directly or indirectly exercises ‘control’ over the other
entity and for this purpose, ‘control’ as defined under the Regulation
2(1)(e) of the PM Regulations shall be referred.
1.4. Co-investment Portfolio Management Services
1.4.1. 6The Co-investment portfolio management services shall be provided in
the following manner:
1.4.1.1. A Manager of Category I or Category II Alternative Investment Fund
(“AIF”) who is also a SEBI registered Portfolio Manager, and intends to
act as Co-investment Portfolio Manager and offer Co-investment
services through portfolio management route, shall do so only under
prior intimation to SEBI.
1.4.1.2. Any other Manager of Category I or Category II AIF, who is not a SEBI
registered Portfolio Manager, and intends to act as Co-investment
Portfolio Manager and offer Co-investment services through portfolio
management route, shall seek registration from SEBI as a Portfolio
Manager in terms of the PM Regulations. Pursuant to the grant of
registration, if such Portfolio Manager is desirous of offering portfolio
management services other than Co-investment, the same shall be
subject to compliance with all provisions of the PM Regulations
including eligibility criteria, and with the prior approval of SEBI.
6 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021
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1.5. Procedure for seeking prior approval for change in control of SEBI
registered Portfolio Managers7 8
1.5.1. The PM Regulations provides that a Portfolio Manager shall obtain prior
approval of SEBI in case of change in control in such manner as may be
specified by SEBI. Accordingly, it has been decided that all SEBI
registered Portfolio Managers shall comply with the following in case they
propose a change in control:
1.5.1.1. An online application shall be made by Portfolio Manager to SEBI for
prior approval through the SEBI Intermediary Portal
(https://siportal.sebi.gov.in).
1.5.1.2. The prior approval granted by SEBI shall be valid for a period of six
months from the date of such approval.
1.5.1.3. Applications for fresh registration pursuant to change in control shall
be made to SEBI within six months from the date of prior approval.
1.5.1.4. 9[Pursuant to grant of prior approval by SEBI, in order to enable existing
investors/ clients to take well informed decision regarding their
continuance or otherwise with the changed management, the portfolio
manager shall inform its existing investors/ clients about the proposed
7 SEBI/HO/IMD-I/DOF1/P/CIR/2021/564 dated May 12, 2021
8 SEBI/HO/IMD-1/DOF1/P/CIR/2022/77 dated June 02, 2022
9 Substituted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/8 dated January 10, 2023. Prior to
substitution, clause 1.5.1.4 read as under:
“Pursuant to grant of prior approval by SEBI, in order to enable existing investors/ clients to take well informed
decision regarding their continuance or otherwise with the changed management, the Portfolio Manager shall
inform its existing investors/ clients about the proposed change prior to effecting the same and give an option
to exit without any exit load, within a period of not less than 30 calendar days, from the date of such
communication.”
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change prior to effecting the same and give an option to exit without
any exit load, within a period of not less than 30 calendar days, from
the date of such communication. However, for the clients under co-
investment portfolio management services, the Portfolio Manager shall
ensure compliance with the second proviso of Regulation 22 (2) of
PMS Regulations.]
1.5.1.5. In matters which involves scheme(s) of arrangement which needs
sanction of the National Company Law Tribunal (“NCLT”) in terms of
the provisions of the Companies Act, 2013, the Portfolio Managers
shall ensure the following:
1.5.1.5.1. The application seeking approval for the proposed change in control
under PM Regulations shall be filed with SEBI prior to filing the
application with NCLT;
1.5.1.5.2. Upon being satisfied with compliance of the applicable regulatory
requirements, in-principle approval shall be granted by SEBI;
1.5.1.5.3. The validity of such in-principle approval shall be three months from
the date of such approval, within which the relevant application shall
be made to NCLT;
1.5.1.5.4. Within 15 days from the date of order of NCLT, Portfolio Manager
shall submit an online application in terms of paragraph 1.5.1.1 of
this Master Circular along with the following documents to SEBI for
final approval:
 Copy of the NCLT Order approving the scheme;
 Copy of the approved scheme;
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 Statement explaining modifications, if any, in the approved
scheme vis-à-vis the draft scheme and the reasons for the
same; and
 Details of compliance with the conditions/ observations
mentioned in the in-principle approval provided by SEBI.
1.5.1.5.5. All other provisions mentioned at paragraphs 1.5.1.2 to 1.5.1.4 of
this Master Circular regarding the procedure for seeking prior
approval for change in control of Portfolio Managers, shall also
apply.
1.6. Format of Net worth calculation10
1.6.1. Following format shall be followed by Portfolio Managers for calculation of
Net worth:
The statement of networth of ……….. based on audited / unaudited accounts
as on ………….
10 SEBI Circular No. IMD/DOF I/PMS/Cir- 5/2009 dated July 31, 2009
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1.7. Certificate of associated persons in the Securities Markets
1.7.1. For employees of Portfolio Managers11
1.7.1.1. The associated persons functioning as principal officer of a Portfolio
Manager or employee(s) of the Portfolio Manager having decision
making authority related to fund management, shall obtain certification
from the National Institute of Securities Markets by passing the NISM-
Series-XXI-B: Portfolio Managers Certification Examination as
mentioned in the communiqué No. NISM/ Certification/Series-XXI-B:
Portfolio Managers (PM) Certification/2021/01 dated June 15, 2021
issued by the National Institute of Securities Markets.
1.7.1.2. The Portfolio Managers shall ensure that all such associated persons
who are principal officers or employees having decision making
authority related to fund management as on the date of this notification
obtain the certification by passing the NISM-Series-XXI-B: Portfolio
Managers Certification Examination within two years from the date12 of
the notification:
Provided that a Portfolio Manager, who engages or employs any such
associated person who is a principal officer or an employee having
decision making authority related to fund management, after the date13
of the Gazette Notification No. SEBI/LAD-NRO/GN/2021/49, shall
ensure that such person obtains certification by passing the NISM-
Series-XXI-B: Portfolio Managers Certification Examination within one
11 Gazette No. SEBI/LAD-NRO/GN/2021/49 dated September 7, 2021
12 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/49 dated September 7, 2021
13 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/49 dated September 7, 2021
Page 15 of 175
year from the date of their employment.
1.7.2. For distributors of Portfolio Managers14
1.7.2.1. The associated persons, engaged by a Portfolio Manager as a
distributor of the Portfolio Management Services, shall obtain
certification from the National Institute of Securities Markets by passing
the NISM-Series-XXI-A: Portfolio Management Services (PMS)
Distributors Certification Examination as mentioned in the communiqué
No. NISM/Certification/Series-XXI-A: Portfolio Management Services
(PMS) Distributors Certification Examination/2021/01 dated February
16, 2021 issued by the National Institute of Securities Markets.
1.7.2.2. The Portfolio Managers shall ensure that all such associated persons
who are distributors of the Portfolio Management Services as on the
date15 of the notification obtain the certification by passing the NISM-
Series-XXI-A: Portfolio Management Services (PMS) Distributors
Certification Examination within two years from the date of the
notification:
Provided that a portfolio manager, who engages or employs any such
associated person who is a distributor of the Portfolio Management
Services, after the date16 of the notification, shall ensure that such
person obtains certification by passing the NISM-Series-XXI-A:
Portfolio Management Services (PMS) Distributors Certification
Examination within one year from the date of their employment:
14 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/48 dated September 7, 2021
15 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/48 dated September 7, 2021
16 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/48 dated September 7, 2021
Page 16 of 175
Provided further that an associated person, who being a distributor of
the Portfolio Management Services, has obtained any of the following
registration/ certification as on the date of this notification
a) a valid AMFI Registration Number (ARN)
b) NISM Series-V-A exam certification
shall be exempted from the requirement of obtaining certification by
passing the NISM-Series-XXI-A: Portfolio Management Services
(PMS) Distributors Certification Examination till the validity of the said
registration/ certification.
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2. OPERATING GUIDELINES
2.1. Guidelines for advertisement by Portfolio Managers17
2.1.1. SEBI has formulated a Code of Advertisement governing any
advertisements issued by the Portfolio Managers in connection with their
activities. All Portfolio Managers registered with SEBI are required to
strictly observe the Code of Advertisement set out in Annexure 2A of this
Master Circular.
2.2. Maintenance of Clients’ Funds in a separate Bank Account by Portfolio
Managers18
2.2.1. The PM Regulations19 states that “the portfolio manager shall segregate
each client’s funds and portfolio of securities and keep them separately
from his own funds and securities and be responsible for safekeeping of
clients’ funds and securities.”
2.2.2. With regard to the above, it is clarified that Portfolio Managers may keep
the funds of all clients in a separate bank account maintained by the
Portfolio Managers subject to the following conditions:
2.2.2.1. There shall be a clear segregation of each client’s fund through proper
and clear maintenance of back office records,
2.2.2.2. Portfolio Managers shall not use the funds of one client for another
client,
17 RPM circular No.1(93-94) dated October 20, 1993
18 IMD/DOF I/PMS/Cir- 4/2009 dated June 23, 2009
19 Regulation 24 (14) of the SEBI (Portfolio Managers) Regulations, 2020
Page 18 of 175
2.2.2.3. Portfolio Managers shall also maintain an accounting system
containing separate client-wise data for their funds and provide
statement to clients for such accounts at least on monthly basis,
2.2.2.4. Portfolio Managers shall reconcile the client-wise funds with the funds
in the aforesaid bank account on daily basis.
2.2.3. With respect to investment in short term Liquid Mutual Funds by Portfolio
Managers, it is clarified that pending investment of funds, any short term
deployment of funds in Liquid Mutual Funds for the purpose of cash
management shall be maintained on the lines as per paragraph 2.2.2 of
this Master Circular20.
2.3. Direct on-boarding of clients by Portfolio Managers21
2.3.1. Portfolio Managers shall provide an option to clients to be on-boarded
directly, without intermediation of persons engaged in distribution
services.
2.3.2. Portfolio Managers shall prominently disclose in its Disclosure
Documents, marketing material and on its website, about the option for
direct on-boarding.
2.3.3. At the time of on-boarding of clients directly, no charges except statutory
charges shall be levied.
20 Cir. /IMD/DF-1/16/2012 dated July 16, 2012
21 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
Page 19 of 175
2.3.4. The above provisions with respect to direct on-boarding of clients shall not
be applicable to Co-investment portfolio management services22.
2.4. Supervision of Distributors23
2.4.1. The Portfolio Managers shall:
2.4.1.1. Ensure that any person or entity involved in the distribution of its
services is carrying out the distribution activities in compliance with the
PM Regulations and circulars issued thereunder from time to time.
2.4.1.2. Pay fees or commission to distributors only on trail-basis. Further, any
fees or commission paid shall be only from the fees received by
Portfolio Managers.
2.4.1.3. Ensure that prospective clients are informed about the fees or
commission to be earned by the distributors for on-boarding them to
specific investment approaches.
2.4.1.4. Ensure that distributors abide by the Code of Conduct as specified in
Annexure 2B of this Master Circular.
2.4.1.5. Have mechanism to independently verify the compliance of its
distributors with the Code of Conduct.
22 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021
23 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
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2.4.1.6. Ensure that, within 15 days from the end of every financial year, a self-
certification is also received from distributors with regard to compliance
with Code of conduct.
2.5. Clarification on minimum investment amount by clients and schemes 24
2.5.1. The Portfolio Managers shall ensure the following;
2.5.1.1. To ensure compliance with the PM Regulations, the first single lump-
sum investment amount received as funds or securities from clients
should not be less than ₹50 Lakh25.
2.5.1.2. Portfolio Managers shall not organize investment portfolios as
‘Schemes’ akin to Mutual Fund Schemes while marketing their services
to clients.
2.6. Written down policies by Portfolio Manager26
2.6.1. Portfolio Managers shall put in place a written down policy (“policy”), in
compliance with the PM Regulations and circulars issued thereunder,
which inter-alia detail the specific activities, role and responsibilities of
various teams engaged in fund management, dealing, compliance, risk
management, back-office, etc., with regard to management of client funds
and securities including the order placement, execution of order, trade
allocation amongst clients and other related matters.
24 Cir. /IMD/DF/16/2010 dated November 02, 2010
25 Gazette notification No. LAD-NRO/GN/2011-12/37/3689 read with Regulations 23(2) of SEBI (Portfolio
Managers) Regulations, 2020
26 SEBI Circular No. SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/133 dated September 30, 2022 & refer SEBI Letter
No. SEBI/HO/IMD-POD-1/P/OW/2023/50456/1 dated December 27, 2023
Page 21 of 175
2.6.2. Portfolio Managers shall also put in place a specific policy, in compliance
with the PM Regulations and circulars issued thereunder, which shall inter-
alia provide for the following:
2.6.2.1. Specific situations (not generic) wherein the orders shall be placed for
each client individually or pooled from trading account of Portfolio
Manager.
2.6.2.2. Scenarios / situations in which deviation from the allotment of securities
as intended at the time of placement of order would be permissible, if
at all.
2.6.2.3. Scenarios, wherein, the Portfolio Manager is required to place certain
margins / collaterals in order to execute certain transactions, details on
how such margins / collaterals shall be segregated / placed from
amongst various clients, without affecting the interest of any client.
2.6.2.4. Deviations, if any, shall be on account of exigency only and require
prior written approval of the Principal Officer and Compliance officer of
the Portfolio Manager with a detailed rationale for such deviation.
2.6.3. The aforesaid policies as mentioned at paragraphs 2.6.1 & 2.6.2 shall be
approved by the Board / equivalent body of the Portfolio Manager.
2.7. Fair and equitable treatment of all clients
2.7.1. Portfolio Managers shall ensure that all clients are treated in a fair and
equitable manner and ensure compliance with the following:
Page 22 of 175
2.7.2. Requirements with respect to investments in all instruments: 27
2.7.2.1. Portfolio Managers shall constitute a dealing team (DT) which shall be
responsible for order placement and execution of all orders in
accordance with the aforesaid policies of the Portfolio Manager. DT
may include the Principal Officer or the person appointed in terms of
Regulation 7(2) (e) of the PM Regulations.
2.7.2.2. Portfolio Managers shall ensure that DT is suitably staffed and comply
with the following:
2.7.2.2.1. All conversations of DT shall be only through the dedicated
recorded telephone lines or through emails from authorized email
ids.
2.7.2.2.2. Mobile phones or any other communication devices other than the
recorded telephone lines shall not be allowed inside the dealing
room.
2.7.2.2.3. Access to internet facilities on computers and other devices inside
the dealing room shall be restricted and shall only be used for
activities related to trade execution.
2.7.2.2.4. Entry/access to the dealing room shall be restricted to authorized
employees as defined in the aforementioned policies of the Portfolio
Manager.
27 SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/133 dated September 30, 2022
Page 23 of 175
2.7.2.2.5. There shall be no sharing of information through any mode, except
for trade execution under the approved policies of the Portfolio
Manager.
2.7.3. For equity, equity-related instruments and Mutual Funds units 28
2.7.3.1. Portfolio Managers with assets under management of INR 1000 crores
or more under discretionary and non-discretionary services, shall have
in place an automated system with minimal manual intervention for
ensuring effective funds and securities management including order
management and allocation of securities to each client.
2.7.3.2. The aforesaid system shall inter-alia clearly capture details with
respect to pre-order placement allocation as well as final allocation of
trades to clients along with instances of deviation, if any, as mentioned
at paragraph 2.6.2.4 above.
2.7.4. Portfolio Managers shall maintain audit trail of all activities related to
management of funds and securities of clients including order placement,
trade execution and allocation. Further, there shall be time stamping with
respect to order placement, order execution and trade allocation.
2.8. Cyber Security and Cyber Resilience framework for Portfolio
Managers29
2.8.1. With rapid technological advancement in the securities market, there is a
greater need for maintaining robust cyber security and to have a cyber-
28 SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/133 dated September 30, 2022
29 Inserted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/046 dated March 29, 2023
Page 24 of 175
resilience framework to protect the integrity of data and guard against
breaches of privacy.
2.8.2. As part of the operational risk management, the Portfolio Managers need
to have robust cyber security and cyber resilience framework in order to
provide essential facilities and services and perform critical functions in
the securities market as Portfolio Manager.
2.8.3. Accordingly, all Portfolio Managers with asset under management of INR
3000 crore or more, under discretionary and non-discretionary portfolio
management service taken together, as on the last date of the previous
calendar month shall comply with the provisions of Cyber Security and
Cyber Resilience as placed at Annexure 2C.
2.8.4. Portfolio Managers and APMI shall take necessary steps for implementing
the above provisions, including putting the required processes and
systems in place to ensure compliance with these provisions.
2.9. Valuation of Securities by Portfolio Managers30
2.9.1. APMI shall prescribe standardized valuation norms for Portfolio
Managers, same as the corresponding norms applicable to the Mutual
Funds. Valuation of the portfolio debt and money market securities by
portfolio managers shall be carried out in accordance with these
standardized valuation norms prescribed by APMI.
2.9.2. APMI shall empanel valuation agencies for the purpose of providing
security level prices to Portfolio Managers. Portfolio Managers shall
mandatorily use valuation services obtained only from one or more of such
30 Inserted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022
Page 25 of 175
empanelled valuation agencies for the purpose of valuation of debt and
money market securities in portfolios managed by them. The ultimate
responsibility for fair valuation shall be that of the Portfolio Manager.
Page 26 of 175
3. INVESTMENTS BY PORTFOLIO MANAGERS
3.1. Transaction in Corporate Bonds through Request for Quote platform by
Portfolio Management Services (PMS)31
3.1.1. In order to enhance transparency pertaining to debt investments by
Portfolio Managers in Corporate Bonds (“CBs”) and to increase liquidity
on exchange platform, the following shall be followed by Portfolio
Managers:
3.1.1.1. On a monthly basis, Portfolio Managers shall undertake at least 10%
of their total secondary market trades by value in CBs in that month by
placing/seeking quotes through one-to-one (OTO) or one-to-many
(OTM) mode on the Request for Quote platform of stock exchanges
(RFQ).
3.1.1.2. In order to ensure compliance with the abovementioned 10 percent
requirement, Portfolio Managers shall consider the trades executed by
value through OTO or OTM mode of RFQ with respect to the total
secondary market trades in CBs, during the current month and
immediate preceding two months on a rolling basis.
3.1.1.3. All transactions in CBs wherein Portfolio Managers is on both sides of
the trade shall be executed through RFQ in OTO mode. However, any
transaction entered by Portfolio Managers in CBs in OTM mode which
gets executed with another Portfolio Managers, shall be counted in
OTM mode.
31 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/678 dated December 09, 2021
Page 27 of 175
3.1.1.4. Portfolio Managers are permitted to accept the Contract Note from the
stock brokers for transactions carried out in OTO and OTM modes of
RFQ.
3.1.2. Portfolio Managers shall ensure that at least 10% (by value) of their
secondary market trades in CBs in current month and immediate
preceding two months are executed by placing / seeking quotes through
OTO or OTM mode of RFQ. For example, for the month of May 2022, the
secondary market trades executed in CBs in the months of March 2022,
April 2022 and May 2022 shall be considered for the purpose of aforesaid
calculation.
3.2. Investment in Derivatives32
3.2.1. Portfolio Managers are permitted to invest in derivatives, including
transactions for the purpose of hedging and portfolio rebalancing, through
recognized stock exchanges.
3.2.2. Portfolio Managers can invest in derivatives on the terms specified in the
Portfolio Management Agreement. The Agreement should contain
complete details pertaining to the manner and terms of usage of derivative
product including quantum of exposure to derivatives (in absolute terms
and as a percentage of investments in other securities in the portfolio),
type of derivative instruments, purpose of using derivatives, type of
derivative position and the exposure thereof, terms of valuing and
liquidating derivative contracts in the event of liquidation of portfolio
32 SEBI/RPM CIRCULAR NO.3 (2002-2003) dated February 5, 2003, and for clarification on hedging and
portfolio rebalancing, the Portfolio Managers may refer to SEBI Circular No. MFD/CIR/21/25467/2002 dated
December 31, 2002.
Page 28 of 175
management scheme, prior permission from investors in the event of any
changes in the manner or terms of usage of derivative contracts etc.
3.2.3. The total exposure of the portfolio client in derivatives should not exceed
his portfolio funds placed with the Portfolio Manager and the Portfolio
Manager should, in essence, invest and not borrow on behalf of his clients.
3.2.4. It may be noted that investment in derivatives shall be only on the terms
mutually agreed between the Portfolio Manager and the client through the
portfolio management agreement. In the event of the any violation of the
terms of the agreement, the Portfolio Manager shall be responsible.
3.2.5. Portfolio Managers are required to provide necessary disclosures in
Disclosure Document in terms of the PM Regulations.
3.3. Participation of Portfolio Managers in Commodity Derivatives Market in
India33
3.3.1. Portfolio Managers are permitted to participate in Exchange Traded
Commodity Derivatives on behalf of their clients.
3.3.2. The participation of Portfolio Managers in the exchange traded commodity
derivatives shall be subject to the following:
3.3.2.1. Portfolio Managers shall appoint SEBI registered Custodians before
dealing in Exchange Traded Commodity Derivatives.
3.3.2.2. Portfolio Managers may participate in Exchange Traded Commodity
Derivatives on behalf of their clients and such participation shall be in
33 SEBI/HO/IMD/DF1/CIR/P/2019/066 dated May 22, 2019
Page 29 of 175
compliance with all the rules, regulations including the PM Regulations
and circulars/guidelines and position limit norms as may be applicable
to ‘clients’, issued by SEBI and recognized stock exchanges from time
to time.
3.3.2.3. Portfolio Managers may participate in Exchange Traded Commodity
Derivatives after entering into an agreement with the clients. Portfolio
Managers may execute addendums to the agreement with their
existing clients, permitting the Portfolio Managers to participate in the
Exchange Traded Commodity Derivatives on their behalf.
3.3.2.4. Portfolio Managers shall provide adequate disclosures in the
Disclosure Document as well as the agreement with the client
pertaining to their participation in the Exchange Traded Commodity
Derivatives, including but not limited to the risk factors, margin
requirements, position limits, prior experience of the Portfolio Manager
in Exchange Traded Commodity Derivatives, valuation of goods, etc.
3.3.2.5. In case dealing in commodity derivatives lead to delivery of physical
goods, there is a possibility that, the Portfolio Manager remains in
possession of the physical commodity. In such cases, the goods need
to be disposed off at the earliest, within the timelines as agreed upon
between the client and the Portfolio Manager. The responsibility of
liquidating the physical goods shall be with the Portfolio Manager.
3.3.2.6. Since Foreign Portfolio Investors (“FPIs”) are allowed to participate in
the Exchange Traded Commodity Derivatives market, subject to
conditions specified by SEBI; Portfolio Managers shall, while
onboarding FPIs as clients and executing transactions in Exchange
Page 30 of 175
Traded Commodity Derivatives market, ensure that all conditions
specified by SEBI are complied with.
3.3.2.7. Portfolio Managers shall also provide periodic reports to the clients as
per the PM Regulations34 regarding their exposure in Exchange Traded
Commodity Derivatives.
3.3.2.8. Portfolio Managers shall report the exposure in Exchange Traded
Commodity Derivatives under the heading of ‘Commodity Derivatives’
in the monthly reports submitted to SEBI.
3.4. Limits on investment in securities of associates/ related parties of
Portfolio Managers35
3.4.1. Regulation 24 (3A) of the PM Regulations inter-alia provides that the
Portfolio Manager shall ensure compliance with the prudential limits on
investment as may be specified by the Board. Accordingly, the Portfolio
Managers shall ensure the following:
3.4.2. Portfolio Manager shall invest up to a maximum of 30 percent of their
client’s portfolio (as a percentage of the client’s assets under
management) in the securities of their own associates/related parties.
Further, the Portfolio Manager shall ensure compliance with the following
limits:
Security Limit for investment in single Limit for investment across
associate/related party (as multiple associates/related
percentage of client’s AUM) parties (as percentage of
client’s AUM)
34 Regulation 31 of SEBI (Portfolio Managers) Regulations, 2020
35 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
Page 31 of 175
Equity 15% 25%
Debt and hybrid securities 15% 25%
Equity + Debt + Hybrid securities 30%
3.4.3. The aforementioned limits shall be applicable only to direct investments
by Portfolio Managers in equity and debt/hybrid securities of their own
associates/related parties and not to any investments in the Mutual Funds.
3.4.4. Hybrid securities includes units of Real Estate Investment Trusts (REITs),
units of Infrastructure Investment Trusts (InvITs), convertible debt
securities and other securities of like nature.
3.5. Prior consent of the client regarding investments in the securities of
associates/related parties36
Regulation 22(1A) of the PM Regulations provides that the Portfolio
Manager may make investments in the securities of its related parties or
its associates only after obtaining the prior consent of the client in such
manner as may be specified by the Board from time to time. Accordingly,
the Portfolio Managers shall ensure compliance with the following:
3.5.1. Portfolio Managers shall obtain a one-time prior positive consent of client
in the format specified at Annexure 3A (consent form), as a part of the
agreement mandated under Regulation 22(1) of the PM Regulations.
3.5.2. The consent form shall have an option to indicate dissent, in case the
client does not want to undertake any investment in the securities of
associates/related parties of respective Portfolio Manager. The client shall
also have an option to specify a limit on investments in the securities of
36 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
Page 32 of 175
associates/related parties of respective Portfolio Manager, below the
ceiling specified in paragraph 3.4.2 above.
3.5.3. The text and figures of the consent form shall be prominently highlighted
and not be below size 12 font.
3.5.4. For new clients, the aforementioned consent shall be obtained at the time
of entering into agreement, in terms of Regulation 22 (1) of the PM
Regulations (i.e., at the time of onboarding of a new client).
3.5.5. For existing clients, the aforementioned consent shall be obtained by way
of execution of a supplementary agreement with the clients. In cases
where the agreements entered with existing clients contain provision for
obtaining consent for investments through a specified mode, the same
mode can be used for obtaining aforesaid prior consent for investments in
the securities of associates/related parties of the Portfolio Manager as
well.
3.5.6. Portfolio Manager shall not make any investments in the securities of
associates/related parties without the prior consent of the client at the time
of on boarding new clients. For existing clients, fresh investments in the
securities of associates/related parties of Portfolio Managers can be made
only after obtaining consent from the client.
3.5.7. In the event of passive breach of the specified investment limits, (i.e.,
occurrence of instances not arising out of omission and/or commission of
portfolio manager), a rebalancing of the portfolio shall be completed by
Portfolio Managers within a period of 90 days from the date of such
breach. Notwithstanding the same, the client may give an informed, prior
Page 33 of 175
positive consent to the Portfolio Manager for waiver from the rebalancing
of the portfolio to rectify any passive breach of the investment limits.
3.5.8. Such requirement of rebalancing in the event of a passive breach of
investment limits shall be suitably disclosed in the consent form mentioned
at paragraph 3.5.2 above and any waiver from the same shall also be
obtained in the same document.
3.5.9. In accordance with Regulation 27 (1) of the PM Regulations, Portfolio
Managers shall maintain records and documents pertaining to:
a) Prior positive consent or dissent, as the case may be.
b) Instances of the passive breach of investment limits, if any.
c) Steps taken, if any to rectify the passive breach of investments limits.
d) Waiver obtained from the client regarding rebalancing in the event of a
passive breach of investment limits.
3.6. Minimum credit rating of securities for investments by Portfolio
Managers 37
3.6.1. Regulation 24 (3C) of the PM Regulations provides that Portfolio
Managers shall not be allowed to invest clients’ funds in unrated securities
of their related parties or their associates. Further, Regulation 24 (3E) of
the PM Regulations provides that the Portfolio Manager shall ensure
investment of its clients’ funds on the basis of the credit rating of securities
as may be specified by the Board. Accordingly, with respect to
investments in debt and hybrid securities, the Portfolio Managers shall
ensure compliance with the following:
37 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
Page 34 of 175
3.6.2. Portfolio Managers offering discretionary portfolio management services
shall not make any investment in below investment grade securities.
3.6.3. Portfolio Managers offering non-discretionary portfolio management
services shall not make any investment in below investment grade listed
securities. However, Portfolio Manager may invest up to 10% of the assets
under management of such clients in unlisted unrated securities of issuers
other than associates/related parties of Portfolio Manager. The said
investment in unlisted unrated debt and hybrid securities shall be within
the maximum specified limit of 25% for investment in unlisted securities
under Regulation 24(4) of the PM Regulations.
3.7. Applicability of above provisions: 38
3.7.1. The requirements as specified at paragraphs 3.4, 3.5 & 3.6 above and in
Regulations 22 (1A), 22(4) (da) & (db), 24 (3A) to 3(E) of the PM
Regulations shall not be applicable for advisory portfolio management
services, co-investment portfolio management services and for client
categories who in turn manage funds under government mandates and/or
are governed under specific Acts of State and/or Parliament.
3.7.2. Notwithstanding the above, for advisory portfolio management services,
Portfolio Managers shall make suitable disclosure to the client regarding
conflict of interest with respect to investments in the securities of the
associates/related parties, while giving advice. The term “associate” for
this purpose shall have the same meaning as defined under explanation
38 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
Page 35 of 175
to Regulation 24 (3C) of the PM Regulations. Further, Portfolio Managers
shall disclose the credit rating of all securities, while giving advice.
Page 36 of 175
4. DISCLOSURE REQUIREMENTS
4.1. Material change in Disclosure Document39
4.1.1. Material change, for the purpose of the PM Regulations40, shall include
change in control of the Portfolio Manager, Principal Officer, fees charged,
charges associated with the services offered, investment approaches
offered (along with the impact of such change) and such other changes as
specified by SEBI from time to time.
4.2. Clause in Disclosure Document/ Client agreement/ Power of attorney41
4.2.1. It has come to the notice of SEBI while perusing disclosure documents/
agreements/ Power of Attorney entered into by the Portfolio Managers
with the clients that many Portfolio Managers are using the following
clause or a similar clause.
‘The portfolio managers’ decision in deployment of the Clients’ account is
absolute and final and can never be called in question or be open to review
at any time during currency of the agreement or any time thereafter.’
4.2.2. It is felt that every client should have the prerogative to question the
decision of portfolio manager and the exercise of discretion by him.
4.2.3. Therefore, it is advised that Portfolio Managers who have incorporated the
said clause or similar clause shall modify it as below:-
39 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
40 Regulation 22 (7) of the SEBI (Portfolio Managers) Regulations, 2020
41 SEBI/IMD/CIR No.1/ 70353 /2006 dated June 28, 2006
Page 37 of 175
‘The portfolio managers’ decision (taken in good faith) in deployment of the
Clients’ account is absolute and final and cannot be called in question or be
open to review at time during the currency of the agreement or any time
thereafter except on the ground of malafide, fraud, conflict of interest or
gross negligence.
4.3. Disclosure of fees and charges42
4.3.1. To ensure transparency and adequate disclosure regarding fees and
charges, the client agreement shall contain a separate annexure which
shall list all fees and charges payable to the portfolio manager. The said
annexure shall contain details of levy of all applicable charges on a sample
portfolio of Rs.50 lacs43 over a period of one year. The fees and charges
shall be shown for 3 scenarios viz. when the portfolio value increases by
20%, decreases by 20% or remains unchanged. An illustration of the same
is enclosed as Annexure 4A of this Master Circular.
4.3.2. All text and figures in the annexure on fees and charges shall be at least
in size 11 font.
4.3.3. New clients shall be required to separately sign the annexure on fees and
charges and add in their own handwriting that they have understood the
fees/ charges structure.
4.4. Publishing of Investor Charter by Portfolio Managers on their
websites44
42 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
43 Clause 3 (v) of SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
44 SEBI/HO/IMD/IMD-II_DOF7/P/CIR/2021/681 dated December 10, 2021
Page 38 of 175
4.4.1. With a view to enhancing awareness of investors about the various
activities which an investor deals with while availing the services provided
by portfolio managers, an investor charter has been prepared by SEBI,
which is enclosed as Annexure 4B of this Master Circular.
4.4.2. The investor charter is a document in an easy to understand language. It
details different services provided by the Portfolio Managers to the
investors along with estimated timelines, like account opening, agreement
with the portfolio manager, periodic statements to the investors, investor
grievance redressal mechanism, responsibilities of investors etc. at one
single place for ease of reference. All registered Portfolio Managers are
advised to bring to the notice of their clients the Investor Charter by
prominently displaying on their websites.
4.5. Performance Disclosure by Portfolio Managers
4.5.1. To ensure compliance with the PM Regulations45, Portfolio Managers shall
disclose the performance of portfolios grouped by investment category for
the past three years as per Annexure 4C of this Master Circular46.
4.5.2. Performance Benchmark reporting to clients47 :
4.5.2.1. [*]48
45 Regulation 22(4)(e) & Regulation 22(6) of SEBI (Portfolio Managers) Regulations, 2020
46 Cir. /IMD/DF/16/2010 dated November 02, 2010
47 IMD/PMS/CIR/1/21727/03 dated November 18, 2003
48 Omitted in line with SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16,
2022. Prior to omission, clause 4.5.2.1 read as under:
“All portfolio managers are required to disclose the performance of their portfolios to their clients, including
disclosure of the performance indicators calculated on the basis of ‘time weighted rate of return’ method
taking each individual category of investments for the immediately preceding three years in case of
discretionary portfolio managers. In order to make the investors fully aware about how their funds have been
Page 39 of 175
4.5.2.2. [The portfolio managers may select benchmark indices in line with para
4.6A of this Master Circular. Any change in the benchmark indices at a
later date shall be recorded and justified with specific reasons thereof.
4.5.2.3. Portfolio Managers have the option to give their management
perception on the performance of their schemes.]49
4.5.2.4. The Boards of portfolio managers may review the performance of the
funds managed by them for each client separately in their meetings
and should take corrective action wherever necessary. They may also
compare the performance of the portfolios with benchmarks.
4.5.3. In relation to performance of the portfolio manager, it is also clarified that
the Portfolio Managers shall:50
4.5.3.1. Consider all cash holdings and investments in liquid funds, for
calculation of performance.
deployed and also to give them an objective analysis of the performance of the portfolios being managed by
the portfolio managers on discretionary basis in comparison with the rise or fall in the markets, portfolio
managers shall disclose the performance of benchmark indices in the periodical reports to be furnished to the
client in terms of the PM Regulations i.e. Regulation 31 of the SEBI (Portfolio Managers) Regulations, 2020.”
49 Modified in line with SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16,
2022. Prior to modification, clause 4.5.2.2 & 4.5.2.3 read as under:
“4.5.2.2. The portfolio managers may select any of the indices available, e.g. BSE (Sensitive) index, S&P CNX
Nifty, BSE 100, BSE 200 or S&P CNX 500, depending on the investment objective and portfolio of the client.
These benchmark indices may be decided by the portfolio managers and any change at a later date shall be
recorded and justified with specific reasons thereof.
4.5.2.3. As the purpose of introducing benchmarks is to indicate the performance of the portfolios vis-à-vis
markets to the investors, the portfolio managers may give performance of more than one index if they so
desire. Also, they have the option to give their management perception on the performance of their schemes.”
50 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
Page 40 of 175
4.5.3.2. Report performance data net of all fees and all expenses (including
taxes).
4.5.3.3. Clearly disclose any change in investment approach that may impact
the performance of client portfolio, in the marketing material.
4.5.3.4. Ensure that performance reported in all marketing material and website
of the Portfolio Manager is the same as that reported to SEBI.
4.5.3.5. Ensure that the aggregate performance of the Portfolio Manager (firm-
level performance) reported in any document shall be same as the
combined performance of all the portfolios managed by the Portfolio
Manager.
4.5.3.6. Provide a disclaimer in all marketing material that the performance
related information provided therein is not verified by SEBI.
4.6. Nomenclature ‘Investment Approach’51
4.6.1. [An investment approach (‘IA’) is the documented investment philosophy
to be adopted by the Portfolio Managers while managing the client funds
in order to achieve client’s investment objectives.] 52 The information about
Investment Approaches offered by Portfolio Managers, shall be uniform
across all types of regulatory reporting, client reporting, disclosure
document, marketing materials and any such document which refer to
services offered by Portfolio Managers.
51 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
52 Inserted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022
Page 41 of 175
4.6.2. Any description of investment approach provided by Portfolio Managers
shall, inter alia, include:
4.6.2.1. investment objective
4.6.2.2. description of types of securities e.g. equity or debt, listed or unlisted,
convertible instruments, etc.
4.6.2.3. basis of selection of such types of securities as part of the investment
approach
4.6.2.4. allocation of portfolio across types of securities
4.6.2.5. appropriate benchmark to compare performance and basis for choice
of benchmark
4.6.2.6. indicative tenure or investment horizon
4.6.2.7. risks associated with the investment approach
4.6.2.8. other salient features, if any.
4.6A. Performance Benchmarking53
In order to help investors in assessing the performance of a Portfolio Manager,
the applicable requirements related to performance reporting and benchmarking
by Portfolio Managers has been reviewed as under:
4.6A.1. In addition to Investment Approach, an additional layer of broadly defined
investment themes called “Strategies” shall be adopted by Portfolio
Managers. These broad Strategies shall be ‘Equity’, ‘Debt’, ‘Hybrid’ and
‘Multi Asset’.
4.6A.2 Each IA shall be tagged to one and only one Strategy from the Strategies
as above. This tagging shall be at the discretion of the concerned Portfolio
53 Inserted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022, &
refer SEBI Letter No. SEBI/HO/IMD/IMD-PoD-2/P/OW/2022/62571/1 dated December 16, 2022, and SEBI
Letter No. SEBI/HO/IMD/POD-II/P/OW/2023/12814/1 dated March 29, 2023
Page 42 of 175
Manager. A Portfolio Manager may tag more than one IA to a Strategy,
but each IA must be tagged to only one Strategy.
4.6A.3 APMI shall prescribe a maximum of three benchmarks for each Strategy.
These benchmarks shall reflect the core philosophy of the Strategy. While
tagging an IA to a particular Strategy, the Portfolio Manager shall select
one benchmark from those prescribed for that Strategy to enable the
investor to evaluate relative performance of the Portfolio Managers.
4.6A.4 The Board of the Portfolio Managers shall be responsible for ensuring
appropriate selection of Strategy and benchmark for each IA.
4.6A.5 Once an IA is tagged to a Strategy and/or to a benchmark, the tagging
shall be changed only after offering an option to subscribers to the IA to
exit without any exit load. The performance track record (of the specific IA
whose tagging with Strategy/ benchmark was changed) prior to the
change shall not be used by the Portfolio Manager for performance
reporting. Further, the same shall be verified as part of annual audit under
the Regulations54.
4.6A.6 The changes in Strategy and/ or benchmark shall be recorded with proper
justification and shall be verified as part of the annual audit under the
Regulations55.
4.7. Disclosure of details of related party investments by Portfolio Managers
56
4.7.1. Regulations 22 (4) (da) & (db) of the PM Regulations provides that the
Portfolio Manager shall disclose in the Disclosure Document the details of
its diversification policy and the details of investment of clients’ funds by
54 Regulation 30 of the SEBI (Portfolio Managers) Regulations, 2020
55 Regulation 30 of the SEBI (Portfolio Managers) Regulations, 2020
56 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
Page 43 of 175
the Portfolio Manager in the securities of its related parties or associates.
Accordingly, the Portfolio Manager shall ensure compliance with the
following:
4.7.2. Disclosure of the details of investment of clients’ funds in the securities of
associate/related parties in the Disclosure Document under the head
“Details of investments in the securities of related parties of the Portfolio
Manager”, in the following format:
Investments in the securities of associates/related parties of Portfolio Manager:
Sr. Investment Name of Investment amount (cost of Value of investment as on percentage of total
No. Approach, the investment) as on last day of last day of the previous AUM as on last day
if any associate/ the previous calendar calendar quarter (INR in of the previous
related quarter (INR in crores) crores) calendar quarter
party
4.7.3. Portfolio Managers shall ensure that any material changes in the above
information is updated in the Disclosure Document and uploaded on their
respective websites within 7 days.
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5. REPORTING REQUIREMENTS
5.1. Submission of monthly report by Portfolio Managers
5.1.1. 57All Registered Portfolio Managers are required to submit monthly report
regarding their portfolio management activity as per the format enclosed
as Annexure 5A58 of this Master Circular.
5.1.2. All Registered Portfolio Managers shall upload the report on SEBI
Intermediaries Portal within 7 working days of the end of each month59
and there is no requirement of sending hard copy of the said report to
SEBI.
5.1.3. In the said report data pertaining to Assets under Management (“AUM”) of
the portfolio manager as on the last calendar day of each month shall be
indicated in Rupees in crores.
5.1.4. Procedure to upload monthly report on portal is as follows:
5.1.4.1. Log on to SEBI Portal at https://siportal.sebi.gov.in using the
Username and Password provided at the time of Registration/ Renewal
as a portfolio manager.
5.1.4.2. Select the portfolio manager tab
5.1.4.3. Select the link: PM Monthly Report
5.1.4.4. Fill the data in the format provided
5.1.4.5. Save the data and then Submit
57 SEBI/IMD/PMS/CIR-3/2009 dated June 11, 2009
58 Revised format as per SEBI circular SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December
10, 2021 to include details of Co-investment Portfolio Management services offered by Portfolio Manager
59 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
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5.1.5. In terms of the PM Regulations60, Compliance Officer of the portfolio
managers shall also be responsible for ensuring compliance with this
Master Circular.
5.2. Submission of compliance reports by Portfolio Manager61
5.2.1. With effect from Financial Year 2019-20, Portfolio Managers are required
to submit the following information to SEBI:62
5.2.1.1. A certificate from the qualified Chartered Accountant certifying the net-
worth as on March 31, every year based on audited account within 6
months from the end of Financial Year.
5.2.1.2. A certificate of compliance with PM Regulations and circulars issued
thereunder, duly signed by the Principal Officer, within 60 days of end
of each financial year. Further, details of non-compliance along with
the corrective actions, if any, duly approved by Board of the Portfolio
Manager.
5.2.2. Submission of Corporate Governance Report:
5.2.2.1. Boards of the Portfolio Managers should review the compliance of
regulations in their periodical meetings. They should develop a system
of getting quarterly reports of compliance of SEBI Regulations and
Guidelines and also that due diligence has been exercised by their
officials in their operations and that the interests of investors are
60 Regulation 34 of the SEBI (Portfolio Managers) Regulation, 2020
61 IMD/PMS/CIR/1/21727/03 dated November 18, 2003
62 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
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protected. Such reports may be placed before the Boards of the
Portfolio Managers by the compliance officers. Boards of the Portfolio
Managers should also review redressal of investors’ grievances. Any
deficiency letters or warning letters issued to the Portfolio Managers by
SEBI should also be placed before the Boards of the Portfolio
Managers.
5.2.2.2. There shall be internal audit by a practicing Chartered Accountant
(“CA”) or Company Secretary (“CS”) so as to judge the quality of
internal procedures being followed by the Portfolio Manager. The
report of the internal audit shall be submitted to the Board of the
Portfolio Manager.
5.2.2.3. Portfolio Managers shall exercise due diligence in all their operational
activities.
5.2.2.4. Portfolio Managers shall report to SEBI on compliance with the
provisions of the above guidelines while submitting the annual reports.
The report should reach SEBI within thirty days from the end of the
financial year.
5.2.3. Failure to submit reports as mentioned in this master circular shall
constitute a default and render the Portfolio Managers liable for action
under the Intermediaries Regulations.
5.3. Firm-level performance reporting by Portfolio Managers63
5.3.1. The firm-level performance data of Portfolio Managers shall be audited
63 Inserted by SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 & SEBI/HO/IMD/IMD-PoD-
1/P/CIR/2023/133 dated August 02, 2023
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annually. Confirmation of compliance with paragraph 4.5.3 of this Master
Circular shall be reported to SEBI within sixty days of end of each financial
year. The said report to SEBI shall be certified by the Directors/Partners
of the Portfolio Manager or by person(s) authorized by the Board of
Directors/Partners of the Portfolio Manager.
5.3.2. Accordingly, Portfolio Managers are required to consider all clients’
portfolios managed (i.e. clients of both discretionary and non-discretionary
portfolio management services) for the purpose of audit of firm-level
performance data.
5.3.3. Standard Terms of Reference by APMI:
5.3.3.1. In order to have uniformity, APMI, in consultation with SEBI, shall
specify standardised Terms of Reference (‘ToR’) for aforesaid audit of
firm-level performance data.
5.3.3.2. The standard ToR shall inter-alia include requirement for Portfolio
Managers to consider clients’ portfolios under all services for the
purpose of audit of firm-level performance data. Performance of
advisory clients may be excluded only if performance of such clients,
either individually or cumulatively, is not reported or published in any
marketing material or website.
5.3.3.3. The standard ToR specified by APMI (available on APMI website: link)
is applicable with effect from October 01, 2023, and shall be
mandatorily followed by all Portfolio Managers for the purpose of
annual audit of firm-level performance data.
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5.3.4. Submission of reports:
5.3.4.1. Portfolio Managers shall submit the confirmation of compliance with the
requirement of annual audit of firm-level performance data in line with
the standard ToR specified by APMI, to SEBI within sixty days from the
end of each financial year. The aforesaid report on confirmation of
compliance to SEBI shall be certified by Directors/ Partners of the
Portfolio Manager or by person(s) authorized by the Board of
Directors/Partners of the Portfolio Manager.
5.3.4.2. Portfolio Managers shall submit audit report on firm-level performance
data to SEBI within sixty days from end of each financial year.
5.4. Offsite Inspection data reporting to SEBI
5.4.1. As a part of off-site inspection and surveillance of Portfolio Managers and
to monitor the compliance of the PM Regulations and circulars issued
therein, SEBI has framed the data structure and all the Portfolio Managers
are required to furnish the data to SEBI under the following
heads/reporting formats:
S. No. Table Name
1 PM Master
2 Client Master
3 Client Folio Master
4 Client Folio AUM
5 Client Capital Transactions
6 Client Expense Master
7 PM Holding Master
8 PM Operating Expense
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9 PM Pool Account Master
10 PM Associated Security Details
5.4.2. The data to be submitted by Portfolio Managers in the aforementioned
reporting formats is prescribed in Annexure 5B.
5.4.3. Portfolio Managers shall submit data as per the specified formats for all its
clients on quarterly basis within 10 days from end of the quarter. Day-wise
data shall be furnished for table headings: “Client Folio AUM” and “Client
Holding Master”.
5.4.4. In their first time reporting, Portfolio Managers shall submit data for all their
clients from April 01, 2020 to September 30, 2023.
5.4.5. Details of the requirements prescribed under various clauses of this
Master Circular that are covered through the reporting formats, as
mentioned in the paragraph 5.4.1 above, are specified in Annexure 5C.
5.4.6. [Any change in the prescribed formats shall be communicated by the
Board from time to time.
5.4.7. Portfolio Managers who are exclusively co-investment managers, shall not
be required to submit the offsite inspection data.
5.4.8. Portfolio Managers are not required to submit data with respect to funds
managed by them for EPFO and other similar government mandates.]64
64 Inserted vide Master Circular for Portfolio Managers dated June 07, 2024
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5.5. Reporting to clients by Portfolio Managers
5.5.1. Portfolio Managers shall furnish a report in the format provided at
Annexure 5D65 of this Master Circular, to their clients on a quarterly basis
66 which inter-alia includes the following67:
5.5.1.1. Details of investment of client’s funds in the securities of
associates/related parties of the Portfolio Manager.
5.5.1.2. Details of instances of passive breach of investment limits, if any, and
steps taken to rectify the same.
5.5.1.3. Details of credit ratings of investments in debt and hybrid securities.
5.6. Reporting of Performance to Clients68
5.6.1. Portfolio Manager shall present the Time-weighted Rate of Return
(‘TWRR’) of the IA along with the trailing return of the selected benchmark
when communicating/ advertising/ publishing/ mentioning performance of
an Investment Approach.
5.6.2. Portfolio Manager shall present the Extended Internal Rate of Return
(‘XIRR’) for each IA the investor invests in when reporting performance to
an investor. This shall be accompanied by the minimum, maximum and
median XIRR return generated across all investors in each of the IA the
investor has invested in. The TWRR of the respective IA(s) and the trailing
65 Revised format as per SEBI circular SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December
10, 2021 to include details of Co-investment Portfolio Management services offered by Portfolio Manager
66 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
67 SEBI Circular No. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2022/112 dated August 26, 2022
68 Inserted by SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022,
SEBI/HO/IMD/IMD-PoD-2/P/OW/2022/62571/1 dated December 16, 2022, SEBI/HO/IMD/POD-
II/P/OW/2023/12814/1 dated March 29, 2023
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return of the benchmark(s) selected shall also be presented separately.
Following disclaimer must accompany this disclosure:
“Please note that performance of your portfolio may vary from that of
other investors and that generated by the Investment Approach across
all investors because of
1) the timing of inflows and outflows of funds; and
2) differences in the portfolio composition because of restrictions and
other constraints.”
5.6.3. The following shall not be mentioned or implied in performance reporting
or in any other communication in any form by the Portfolio Managers:
5.6.3.1. Any other categorization/ classification of IAs, except for the Strategy
that they are tagged to.
5.6.3.2. Model Portfolio returns
5.6.3.3. The performance of one or more cherry-picked investor(s)
However, aggregated performance statistics of all investors in an IA may
be used by a Portfolio Manager for aggregated performance reporting.
5.6.4. Portfolio Manager shall disclose relative performance of its investment
approach in all the marketing material where performance of the
concerned investment approach is being presented. Such disclosure of
relative performance shall, at minimum, include the following:
5.6.4.1. Performance relative to the selected benchmark
5.6.4.2. Performance relative to other Portfolio Managers within the selected
Strategy
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5.6.5. Verification of all the above performance statistics shall be carried out in
the annual audit under the Regulations69.
5.6.6. Portfolio Managers shall also submit the monthly reports to APMI in
addition to SEBI within 7 working days from the end of each month. APMI
shall make available the monthly reports of the Portfolio Managers on
APMI website in an intuitive and user-friendly manner facilitating ease of
comparison so as to provide access to portfolio level, investment approach
level, portfolio manager level and industry level information to all the
stakeholders. APMI shall also make available relative performance of
each investment approach within the strategy to concerned portfolio
manager and also disclose the same on its website.
5.6.7. The above provisions under para 5.6.1 to 5.6.6 shall be applicable to any
entity reporting/ publishing/ advertising performance of any Investment
Approach of any Portfolio Manager.
5.6.8. Portfolio of investors/clients of portfolio manager shall not be covered
under provisions 2.9, 4.6.1A, 4.6A, 5.6, if,
5.6.8.1. Investors are governed by separate statutes like Provident Funds
(Employees’ Provident Fund Organization, Coal Mines Provident Fund
Organization, Exempted Provident Fund Trusts), Employee State
Insurance Corporation, Postal Life Insurance, etc.
5.6.8.2. The non-individual Investors are regulated by RBI, IRDA & PFRDA for
whom specific valuation and/or benchmarking norms have been
specified by the concerned regulator(s).
69 Regulation 30 of the SEBI (Portfolio Managers) Regulations, 2020.
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subject to verification of compliance with the above conditions in the
annual audit under Regulation 30 of the PM Regulations.
5.6.9. Portfolio Managers shall not advertise/ publish/ mention to any entity other
than those belonging to the investor category to which said Investment
Approach is offered the returns of the Investment Approaches where
exception as above has been exercised. Portfolio Managers may,
however, include the assets managed in such Investment Approaches in
their total AUM when communicating publicly as well as in regulatory
reporting.
5.6.10. Letters issued to APMI with respect to Performance Benchmarking are
enclosed under ‘Policy related letters/emails issued by SEBI’
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6. FEES AND CHARGES
6.1. Regulation of Fees and Charges
6.1.1. The inter se relationship between the portfolio manager and client, mutual
rights, liabilities and obligations relating to management of funds or
portfolio of securities are required to be specified in the agreement signed
between the portfolio manager and the client. The contents of the portfolio
manager-client agreement are laid out in the PM Regulations70.
6.1.2. In order to bring about greater uniformity, clarity and transparency with
regard to fees and charges, portfolio managers are advised to take the
following measures in respect of all client agreements:
6.1.3. Fees and Charges71 72
6.1.3.1. As provided in the PM Regulations73, no upfront fees shall be charged
by the Portfolio Managers, either directly or indirectly, to the clients74.
6.1.3.2. Brokerage at actuals shall be charged to clients as expense.
6.1.3.3. Operating expenses excluding brokerage, over and above the fees
charged for Portfolio Management Service, shall not exceed 0.50% per
annum of the client’s average daily AUM.
6.1.3.4. Charges for all transactions in a financial year (Broking, Demat,
custody etc.) through self or associates shall be capped at 20% by
value per associate (including self) per service. Any charges to
70 Regulation 22 read with Schedule IV of the SEBI (Portfolio Managers) Regulations, 2020
71 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
72 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
73 Regulation 22 (11) of the SEBI (Portfolio Managers) Regulations, 2020
74 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
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self/associate shall not be at rates more than that paid to the non-
associates providing the same service.
6.1.3.5. The provisions with respect to fees and charges shall not be applicable
to Co-investment services75.
6.1.3.6. Profit/ performance shall be computed on the basis of high water mark
principle over the life of the investment, for charging of performance /
profit sharing fee.
High Water Mark Principle: High Water Mark shall be the highest
value that the portfolio/account has reached. Value of the portfolio for
computation of high watermark shall be taken to be the value on the
date when performance fees are charged. For the purpose of charging
performance fee, the frequency shall not be less than quarterly. The
portfolio manager shall charge performance based fee only on
increase in portfolio value in excess of the previously achieved high
water mark.
Illustration: Consider that frequency of charging of performance fees
is annual. A client’s initial contribution is ₹50,00,000, which then rises
to ₹60,00,000 in its first year; a performance fee/ profit sharing would
be payable on the ₹10,00,000 return. In the next year the portfolio
value drops to ₹55,00,000 hence no performance fee would be
payable. If in the third year the Portfolio rises to ₹65,00,000, a
performance fee/profit sharing would be payable only on the ₹5,00,000
profit which is portfolio value in excess of the previously achieved high
75 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021
Page 56 of 175
water mark of ₹60,00,000, rather than on the full return during that year
from ₹55,00,000 to ₹65,00,000.
6.1.3.7. All fees and charges shall be levied on the actual amount of clients’
assets under management.
6.1.3.8. High Water Mark shall be applicable for discretionary and non-
discretionary services and not for advisory services.
6.1.3.9. In case of interim contributions/ withdrawals by clients, performance
fees may be charged after appropriately adjusting the high water mark
on proportionate basis.
6.1.4. Exit Load:76
6.1.4.1. In case client portfolio is redeemed in part or full, the exit load charged
shall be as under:
6.1.4.1.1. In the first year of investment, maximum of 3% of the amount
redeemed.
6.1.4.1.2. In the second year of investment, maximum of 2% of the amount
redeemed.
6.1.4.1.3. In the third year of investment, maximum of 1% of the amount
redeemed.
6.1.4.1.4. After a period of three years from the date of investment, no exit
load.
76 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
Page 57 of 175
6.1.4.2. The provisions with respect to exit load as specified at paragraph
6.1.4.1 shall not be applicable to Co-investment services77.
6.1.5. In case of large value accredited investors, the quantum and manner of
exit load applicable to the client of the Portfolio Manager shall be governed
through bilaterally negotiated contractual terms and the provisions of
paragraph 6.1.4 of this Master Circular shall not be applicable78.
6.1.5.1. “Accredited Investor” shall have the same meaning as assigned to it
under clause (ab) of sub-regulation (1) of regulation 2 of the Securities
and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012.
6.1.6. Maximum Liability79
6.1.6.1. The PM Regulations80 provide that the agreement between the
portfolio manager and the client shall, inter alia, contain, in case of a
discretionary portfolio manager, a condition that the liability of a client
shall not exceed his investment with the portfolio manager.
6.1.6.2. Portfolio managers shall strictly comply with the aforesaid Regulation.
77 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021
78 SEBI/HO/IMD/IMD-I DOF1/P/CIR/2021/693 dated December 21, 2021
79 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
80 Regulation 22(2)(m) of the SEBI (Portfolio Managers) Regulations, 2020
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7. GRIEVANCE REDRESSAL
7.1. Dispute Resolution81
7.1.1. The PM Regulations82 provide for settlement of grievances/disputes and
provision for arbitration in the portfolio manager – client agreement.
7.1.2. In case of any dispute regarding fees and charges, the same shall be
referred to arbitration for settlement as per the terms of the agreement,
under the Arbitration and Conciliation Act, 1996.
7.2. Disclosure of Investor Complaints by Portfolio Managers on their
websites83
7.2.1. In order to enhance transparency in the Investor Grievance Redressal
Mechanism, all Portfolio Managers on a monthly basis shall disclose on
their websites, the data pertaining to all complaints including SCORES
complaints received by them in the format mentioned in Annexure 7A of
this Master Circular. The information shall be made available by 07th of the
succeeding month.
7.2.2. Further, the Portfolio Managers are advised to display link/option on their
websites and mobile apps so as to enable their clients to lodge complaint
with them directly. Additionally, link to SEBI Complaints Redress System
(“SCORES”) website and the link to download the SCORES mobile app
may also be provided by the Portfolio Managers on their websites.
81 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
82 Regulation 22 read with clause 18 of Schedule IV of the SEBI (Portfolio Managers) Regulations, 2020
83 SEBI/HO/IMD/IMD-II_DOF7/P/CIR/2021/681 dated December 10, 2021
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ANNEXURES
1 Annexure 1A: Online Processing of Portfolio Manager Applications
2 Annexure 2A: Guidelines for Advertisements by Registered Portfolio Managers
3 Annexure 2B: Code of Conduct for Distributors of Portfolio Management
Services
4 Annexure 2C: Cyber Security and Cyber Resilience framework
5 Annexure 3A: Format of obtaining the consent from the client
6 Annexure 4A: Illustration Annexure on Fees and Charges
7 Annexure 4B: Format of Investor Charter in Respect of Portfolio Management
Services
8 Annexure 4C: Format for disclosure of Performance of the Portfolio Manager
9 Annexure 5A: Format for Monthly Report to SEBI
10 Annexure 5B: Offsite Inspection Reporting Formats for Portfolio Managers
11 Annexure 5C:Details of reporting requirements as per the provisions of the
Master Circular
12 Annexure 5D: Format of Quarterly Reporting to Client
13 Annexure 7A: Format of Complaint Data to be displayed by Portfolio Managers
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Annexure 1A: Online Processing of Portfolio Manager Applications
Online Process for Fresh Registration
a. Log-in ID and Password will be generated on receipt of a fresh application
for registration as a Portfolio Manager.
b. The URL of the SEBI portal, the Log-in ID and Password will be e-mailed to
the Compliance Officer or the Principal Officer only.
c. On receipt of the Log-in ID and Password the applicant should fill up all the
details by clicking “Fresh Registration” under the tab “Portfolio Manager”
given on the SEBI Intermediary Portal (“SI Portal”).
d. All instructions on how to fill the details under every tab should be read before
filling the online form. The same can be accessed by clicking the “Blue
Question Mark” on the top right hand corner of every page.
e. The details filled under every tab should be saved by clicking on the “Saved
Draft” button as soon as a particular tab is completely filled up.
f. Once all the details are filled up, the applicant should submit the online
application form by clicking the “Final Submit” button.
g. After SEBI approval, the applicant will be required to fill the fee details. The
same will be sent through a mail which can be accessed by clicking the link
“My Worklist” on the home page of SEBI Intermediary Portal.
h. Inside the mail, there will be a link “Enter Fee Details” through which the
applicant has to enter the fee details and save it.
i. Once the details relating to fees are entered and saved, it must be adjusted
against the outstanding amount as per the instructions given in the “blue
question mark” on the top right hand corner of the page.
j. Once the fees are adjusted, the fee details must be saved and then
submitted, by clicking the “Submit” button in the e-mail, to SEBI for final
approval.
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Online Process for Updation of Information
a. There can be any change in information that a registered Portfolio Managers
can undergo during its operations.
b. Apart from sending the physical copy of such changes in information to SEBI,
the same should be updated on the SEBI Intermediary Portal.
c. It can be done by clicking “Updation of Registration” under the tab “Portfolio
Manager” given on the SEBI Intermediary Portal.
d. All instructions to fill the details under every tab can be accessed by clicking
the “Blue Question Mark” on the top right hand corner of every page.
e. The details changed under every tab should be saved by clicking on the
“Saved Draft” button.
f. Once the changed details are updated, the applicant should submit the
updation form by clicking the “Final Submit” button.
g. On receipt of the updation form, the online updation shall be approved by
SEBI.
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Annexure 2A: Guidelines for Advertisements by Registered Portfolio
Managers
For the purpose of these guidelines, the expression “advertisement” means notices,
brochures, pamphlets, circulars, showcards, catalogues, hoardings, placards,
posters, insertions in newspapers, pictures, films, radio / television programmes or
through any electronic media”.
1. CODE OF ADVERTISEMENT
1.1. An advertisement shall be truthful, fair and clear and shall not contain any
statement, promise or forecast which is untrue or misleading.
1.2. An advertisement shall be considered to be misleading if it contains –
(i) Statements made about the performance or activities of the Portfolio
Manager in the absence of necessary explanatory or qualifying
statements, which may give an exaggerated picture of the performance
or activities of the Portfolio Manager, than what it really is.
(ii) An inaccurate portrayal of the past performance or portrayal in a manner
which implies that past gains or income will be repeated in future.
1.3. The advertisement shall not be so designed in content and format or in print
as to be likely to be misunderstood, or likely to disguise the significance of
any statement. Advertisement shall not contain statements which directly or
by implication or by omission mislead the investor.
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1.4. The publicity literature should contain only information, the details of which
are contained in the Portfolio Managers scheme particulars.
1.5. As the investors may not be sophisticated in legal or financial matters, care
should be taken that the advertisement is set forth in a clear, concise and
understandable manner. Extensive use of technical or legal terminology or
complex language and the inclusion of excessive details which may detract
the investors should be avoided.
1.6. The advertisement shall not contain information, the accuracy of which is to
any extent dependent on assumptions.
1.7. The advertisement shall not contain any promise or guarantee of
assured/fixed return to the investors, either directly or indirectly.
1.8. The advertisement shall not compare one Portfolio Manager with another,
implicitly or explicitly, unless the comparison is fair and all information
relevant to the comparison is included in the advertisement.
2. OBSERVANCE OF CODE OF ADVERTISEMENT
2.1. Every Portfolio Manager shall strictly observe the Code of Advertisement set
out in paragraph 1 given above. Any breach of the Code would be construed
as breach of Code of conduct set out in Schedule III to the Securities and
Exchange Board of India (Portfolio Managers) Regulations, 2020.
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Annexure 2B: Code of Conduct for Distributors of Portfolio Management
Services
1. The Code of Conduct, as provided hereunder, shall be applicable to all persons
involved in the distribution of Portfolio Management Services.
2. All distributors shall:
i. Adhere to the Securities and Exchange Board of India (Portfolio Managers)
Regulations, 2020 and circulars issued from time to time related to
distributors, distribution, advertising practices of Portfolio Management
Services, etc.
ii. Maintain high standards of integrity, promptitude and fairness in the conduct
of all their business.
iii. Act with due skill, care and diligence in the conduct of all their business.
iv. Consider investor's interest, risk profiling and suitability to their financial
needs while marketing Portfolio Management Services.
v. Take necessary steps to ensure that the clients’ interest is protected.
vi. Ensure that commission or incentive shall never form the basis for
recommending Portfolio Management Services.
vii. Be fully conversant with the Disclosure Document, Investment Approaches,
fees and charges and the terms of agreement to be entered between the
client and the Portfolio Manager.
viii. Disclose to the clients all material information including the details of
distribution commissions for various Investment Approaches.
ix. Assist clients in completing Know Your Client (“KYC”) and In-Person
Verification related procedures.
x. Provide full and latest information about investment approaches and also
highlight the assumptions made in performance calculations, risk
assessments, performance projections etc., if any, for such investment
approaches.
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xi. Inform the clients about the risks and level of control over the administration
of Portfolio associated with the type of Portfolio Management Services
offered (i.e. Discretionary, Non-discretionary or Advisory).
xii. Abstain from assuring returns in any type of Investment Approach and from
any kind of mis-representation.
xiii. Abstain from attracting clients through unethical means such as offer of
rebate/gifts etc.
xiv. Maintain necessary infrastructure to provide support to clients in timely
receipt of disclosure document, statement of portfolio and performance,
statement of fees, audit report, etc.
xv. Maintain confidentiality of clients’ details, deals and transactions, which they
come to know in their business relationship.
xvi. Abstain from making negative statements about other Portfolio Managers or
Investment Approaches. Make comparisons, if any, only with the similar and
comparable products along with complete facts.
xvii. Not indulge in any manipulative, fraudulent or deceptive practices or spread
rumours with a view to make personal gain.
xviii. Hold valid Certification, as specified by SEBI, at all times.
****
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Annexure 2C: Cyber Security and Cyber Resilience framework
1. Cyber-attacks and threats attempt to compromise the Confidentiality, Integrity,
and Availability (CIA) of the computer systems, networks, and databases
(Confidentiality refers to limiting access of systems and information to authorized
users, Integrity is the assurance that the information is reliable and accurate, and
Availability refers to guarantee of reliable access to the systems and information
by authorized users). The cyber security framework includes measures, tools,
and processes that are intended to prevent cyber-attacks and improve cyber
resilience. Cyber Resilience is an organization’s ability to prepare and respond
to a cyber-attack and to continue operations during, and recover from, a cyber-
attack.
Governance
2. As part of the operational risk management framework to manage risk to
systems, networks, and databases from cyber-attacks and threats, Portfolio
Managers should formulate comprehensive cyber security and cyber resilience
policy document encompassing the framework mentioned hereunder. The policy
document should be approved by the Board or equivalent body of the Portfolio
Manager, and in case of deviations from the suggested framework, reasons for
such deviations should also be provided in the policy document. The policy
document should be reviewed by the Board or equivalent body of the Portfolio
Manager at least once annually with the view to strengthen and improve its cyber
security and cyber resilience framework.
3. The cyber security and cyber resilience policy should include the following
process to identify, assess, and manage cyber security risks associated with
processes, information, networks, and systems;
a. ‘Identify’ critical IT assets and risks associated with such assets,
b. ‘Protect’ assets by deploying suitable controls, tools, and measures,
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c. ‘Detect’ incidents, anomalies, and attacks through appropriate monitoring
tools/processes,
d. ‘Respond’ by taking immediate steps after identification of the incident,
anomaly, or attack,
e. ‘Recover’ from incident through incident management, disaster recovery,
and business continuity framework.
4. The Cyber security policy should encompass the principles prescribed by the
National Critical Information Infrastructure Protection Centre (NCIIPC) of the
National Technical Research Organization (NTRO), Government of India, in the
report titled ’Guidelines for Protection of National Critical Information
Infrastructure’ and subsequent revisions, if any, from time to time.
5. Portfolio Managers should also incorporate best practices from standards such
as ISO 27001, ISO 27002, COBIT 5, etc., or their subsequent revisions, if any,
from time to time.
6. Portfolio Managers should designate a senior official as Chief Information
Security Officer (CISO) whose function would be to assess, identify and reduce
cyber security risks, respond to incidents, establish appropriate standards and
controls, and direct the establishment and implementation of processes and
procedures as per the cyber security and resilience policy approved by the Board
or equivalent body of Portfolio Manager.
7. The Board or equivalent body of the Portfolio Manager shall constitute a
Technology Committee comprising experts proficient in technology. This
Technology Committee should on a half yearly basis review the implementation
of the cyber security and cyber resilience policy approved by their Board or
equivalent body, and such review should include a review of their current IT and
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cyber security and cyber resilience capabilities, set goals for a target level of
cyber resilience, and establish a plan to improve and strengthen cyber security
and cyber resilience. The review shall be placed before the Board or equivalent
body of the Portfolio Manager for appropriate action.
8. The Portfolio Managers should establish a reporting procedure to facilitate
communication of unusual activities and events to CISO or to the senior
management in a timely manner.
9. The aforementioned committee and the senior management of the Portfolio
Manager, including the CISO, should periodically review instances of cyber-
attacks, if any, domestically and globally, and take steps to strengthen cyber
security and cyber resilience framework.
10. Portfolio Managers should define the responsibilities of its employees,
outsourced staff, and employees of vendors and other entities, who may have
access to or use systems/networks of the Portfolio Managers, towards ensuring
the goal of cyber security.
Identify
11. Portfolio Manager shall identify and classify critical assets based on their
sensitivity and criticality for business operations, services, and data
management. The critical assets shall include business-critical systems,
internet-facing applications/ systems, systems that contain sensitive data,
sensitive personal data, sensitive financial data, Personally Identifiable
Information (PII) data, etc. All the ancillary systems used for accessing/
communicating with critical systems either for operations or maintenance shall
also be classified as critical assets. The Board or equivalent body of the Portfolio
Manager shall approve the list of critical assets.
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To this end, Portfolio Manager shall maintain an up-to-date inventory of its
hardware and systems, software and information assets (internal and external),
details of its network resources, connections to its network and data flows.
12. Portfolio Managers should accordingly identify cyber risks (threats and
vulnerabilities) that it may face, along with the likelihood of such threats and
impact on the business and thereby, deploy controls commensurate to the
criticality.
13. Portfolio Managers should also encourage its third-party service providers, if
any, such as Custodians, Brokers, Distributors, etc. to have similar standards of
Information Security.
Protection
Access Controls
14. No person by virtue of rank or position should have any intrinsic right to access
confidential data, applications, system resources or facilities.
15. Any access to Portfolio Manager’s systems, applications, networks, databases,
etc., should be for a defined purpose and for a defined period. Portfolio Manager
should grant access to IT systems, applications, databases, and networks on a
need-to-use basis and based on the principle of least privilege. Such access
should be for the period when the access is required and should be authorized
using strong authentication mechanisms.
16. Portfolio Manager should implement strong password controls for users’ access
to systems, applications, networks and databases. Password controls should
include a change of password upon first log-on, minimum password length and
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history, password complexity as well as maximum validity period. The user
credential data should be stored using strong and latest hashing algorithms.
17. Portfolio Managers should ensure that records of user access are uniquely
identified and logged for audit and review purposes. Such logs should be
maintained and stored in encrypted form for a time period not less than two (2)
years.
18. Portfolio Managers should deploy additional controls and security measures to
supervise staff with elevated system access entitlements (such as admin or
privileged users). Such controls and measures should inter-alia include
restricting the number of privileged users, periodic review of privileged users’
activities, disallowing privileged users from accessing systems logs in which their
activities are being captured, strong controls over remote access by privileged
users, etc.
19. Account access lock policies after failure attempts should be implemented for all
accounts.
20. Employees and outsourced staff such as employees of vendors or service
providers, who may be given authorized access to the Portfolio Manager’s critical
systems, networks, and other computer resources, should be subject to stringent
supervision, monitoring, and access restrictions.
21. Two-factor authentication at log-in should be implemented for all users that
connect using online/ internet facility.
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22. Portfolio Managers should formulate an Internet access policy to monitor and
regulate the use of internet and internet based services such as social media
sites, cloud-based internet storage sites, etc.
23. Proper ‘end of life’ mechanism should be adopted to deactivate access privileges
of users who are leaving the organization or whose access privileges have been
withdrawn.
Physical Security
24. Physical access to the critical systems should be restricted to minimum. Physical
access of outsourced staff or visitors should be properly supervised by ensuring
at the minimum that outsourced staff or visitors are accompanied at all times by
authorized employees.
25. Physical access to the critical systems should be revoked immediately if the
same is no longer required.
26. Portfolio Managers should ensure that the perimeter of the critical equipment
rooms is physically secured and monitored by employing physical, human and
procedural controls such as the use of security guards, CCTVs, card access
systems, mantraps, bollards, etc. where appropriate.
Network Security Management
27. Portfolio Managers should establish baseline standards to facilitate consistent
application of security configurations to operating systems, databases, network
devices, and enterprise mobile devices within the IT environment. The Portfolio
Manager should conduct regular enforcement checks to ensure that the baseline
standards are applied uniformly. The checks should be done at least once in a
year.
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28. Portfolio Managers should install network security devices, such as firewalls as
well as intrusion detection and prevention systems, to protect their IT
infrastructure from security exposures originating from internal and external
sources.
29. Anti-virus software should be installed on servers and other computer systems.
Updation of anti-virus definition files and automatic anti-virus scanning should be
done on a regular basis.
Security of Data
30. Data-in motion and Data-at-rest should be in encrypted form by using strong
encryption methods such as Advanced Encryption Standard (AES), RSA, SHA-
2, etc.
31. Portfolio Managers should implement measures to prevent unauthorized access
or copying or transmission of data / information held in contractual or fiduciary
capacity. It should be ensured that confidentiality of information is not
compromised during the process of exchanging and transferring information with
external parties.
32. The information security policy should also cover use of devices such as mobile
phone, faxes, photocopiers, scanners, etc. that can be used for capturing and
transmission of data.
33. Portfolio Managers should allow only authorized data storage devices through
appropriate validation processes.
Hardening of Hardware and Software
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34. Only a hardened and vetted hardware / software should be deployed by the
Portfolio Managers. During the hardening process, Portfolio Managers should
inter-alia ensure that default passwords are replaced with strong passwords and
all unnecessary services are removed or disabled in equipments/software.
35. All open ports which are not in use or can potentially be used for exploitation of
data should be blocked. Other open ports should be monitored and appropriate
measures should be taken to secure the ports.
Application Security and Testing
36. Portfolio Managers should ensure that regression testing is undertaken before
new or modified system is implemented. The scope of tests should cover
business logic, security controls and system performance under various stress-
load scenarios and recovery conditions.
Patch Management
37. Portfolio Managers should establish and ensure that the patch management
procedures include the identification, categorization and prioritization of security
patches. An implementation timeframe for each category of security patches
should be established to implement security patches in a timely manner.
38. Portfolio Managers should perform rigorous testing of security patches before
deployment into the production environment so as to ensure that the application
of patches do not impact other systems.
Disposal of systems and storage devices
39. Portfolio Managers should frame suitable policy for disposals of the storage
media and systems. The data / information on such devices and systems should
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be removed by using methods viz. wiping / cleaning / overwrite, degauss and
physical destruction, as applicable.
Vulnerability Assessment and Penetration Testing (VAPT)
40. Portfolio Managers shall carry out periodic VAPT, inter-alia, including critical
assets and infrastructure components like servers, networking systems, security
devices, load balancers, other IT systems pertaining to the activities done as
Portfolio Manager, etc., in order to detect security vulnerabilities in the IT
environment and in-depth evaluation of the security posture of the system
through simulations of actual attacks on its systems and networks.
Portfolio Managers shall conduct VAPT at least once in a financial year.
However, for the Portfolio Managers, whose systems have been identified as
“protected system” by National Critical Information Infrastructure Protection
Centre (NCIIPC) under the Information Technology (IT) Act, 2000, VAPT shall
be conducted at least twice in a financial year.
Further, all Portfolio Managers shall engage only Indian Computer Emergency
Response Team (CERT-In) empanelled organizations for conducting VAPT. The
final report on said VAPT shall be submitted to SEBI after approval from
Technology Committee of respective Portfolio Manager, within 1 month of
completion of VAPT activity.
41. Any gaps or vulnerabilities detected shall be remedied on immediate basis and
compliance of closure of findings identified during VAPT shall be submitted to
SEBI within 3 months post the submission of final VAPT report.
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42. In addition, Portfolio Managers shall perform vulnerability scanning and conduct
penetration testing prior to the commissioning of a new system which is a critical
system or part of an existing critical system.
Monitoring and Detection
43. Portfolio Managers should establish appropriate security monitoring systems
and processes to facilitate continuous monitoring of security events and timely
detection of unauthorized or malicious activities, unauthorized changes,
unauthorized access and unauthorized copying or transmission of data /
information held in contractual or fiduciary capacity, by internal and external
parties. The security logs of systems, applications and network devices should
also be monitored for anomalies.
44. Further, to ensure high resilience, high availability and timely detection of attacks
on systems and networks, Portfolio Managers should implement suitable
mechanism to monitor capacity utilization of its critical systems and networks.
45. Suitable alerts should be generated in the event of detection of unauthorized or
abnormal system activities, transmission errors or unusual online transactions.
Response and Recovery
46. Alerts generated from monitoring and detection systems should be suitably
investigated, including impact and forensic analysis of such alerts, in order to
determine activities that are to be performed to prevent expansion of such
incident of cyber-attack or breach, mitigate its effect and eradicate the incident.
47. The response and recovery plan of the Portfolio Manager should aim at the
timely restoration of systems affected by incidents of cyber-attacks or breaches.
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Portfolio Managers should have Recovery Time Objective (RTO) and Recovery
Point Objective (RPO) not more than 4 hours and 30 minutes, respectively
48. The response plan should define responsibilities and actions to be performed by
its employees and support or outsourced staff in the event of cyber-attacks or
breach of cyber security mechanism.
49. Any incident of loss or destruction of data or systems should be thoroughly
analyzed and lessons learned from such incidents should be incorporated to
strengthen the security mechanism and improve recovery planning and
processes.
50. Portfolio Managers should also conduct suitable periodic drills to test the
adequacy and effectiveness of response and recovery plan.
Sharing of information
51. All cyber-attacks, threats, cyber-incidents, and breaches experienced by
Portfolio Managers shall be reported to SEBI within 6 hours of noticing/ detecting
such incidents or being brought to their notice about such incidents. The incident
shall also be reported to CERT-In in accordance with the guidelines/ directions
issued by CERT-In from time to time. Additionally, the Portfolio Manager, whose
systems have been identified as “protected system” by NCIIPC, shall also report
the incident to NCIIPC. The quarterly reports containing information on cyber-
attacks, threats, cyber-incidents, and breaches experienced by Portfolio
Manager and measures taken to mitigate vulnerabilities, threats and attacks
including information on bugs/ vulnerabilities/ threats that may be useful for other
Portfolio Managers shall be submitted to SEBI within 15 days from the quarter
ended June, September, December and March of every year.
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The above information/ reports shall be shared through the dedicated e-mail ids:
vapt_reports@sebi.gov.in and cybersecurity_pms@sebi.gov.in
52. Such details as are felt useful for sharing with other Portfolio Managers in
masked and anonymous manner shall be shared using mechanism to be
specified by SEBI from time to time.
Training
53. Portfolio Managers should conduct periodic training programs to enhance
awareness level among the employees and outsourced staff, vendors, etc. on IT
/ Cyber security policy and standards. Special focus should be given to build
awareness levels and skills of staff from non-technical disciplines.
54. The training program should be reviewed and updated to ensure that the
contents of the program remain current and relevant.
Periodic Audit
55. Portfolio Managers shall arrange to have its systems audited on an annual basis
by an independent CISA / CISM qualified or CERT-IN empanelled auditor to
check compliance with the above areas and shall submit the report to SEBI along
with the comments of the Board or equivalent body of Portfolio Manager within
three months of the end of the financial year.
Vendors or Service Providers
56. Portfolio Managers have outsourced many of their critical activities to different
agencies / vendors / service providers. The responsibility, accountability and
ownership of those outsourced activities lies primarily with Portfolio Manager.
Therefore, Portfolio Manager have to come out with appropriate monitoring
mechanism through clearly defined framework to ensure that all the
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requirements as specified in this circular is complied with. The periodic report
submitted to SEBI should highlight the critical activities handled by the agencies
and to certify the above requirement is complied.
*********************
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Annexure 3A: Format of obtaining the consent from the client
1. This document is for obtaining the consent/dissent for investment by Portfolio
Manager in its associates/related parties.
2. As per SEBI (Portfolio Managers) Regulations, 2020, the limits applicable for
investment in the securities of associates/related parties of Portfolio Manager
are as under:
Security Limit for investment in single Limit for investment across
associate/related party (as multiple associates/related
percentage of client’s AUM) parties (as percentage of
client’s AUM)
Equity 15% 25%
Debt and hybrid securities 15% 25%
Equity + Debt + Hybrid 30%
securities
3. The client may choose not to invest in the securities of associates/related
parties of the Portfolio Manager. Further, the client may choose a limit lower
than the limits prescribed at paragraph 2 above.
4. The risks and conflict of interest associated with investment by the Portfolio
Manager in the securities of its associates/related parties are as under:
Risks:
Conflict of Interest:
5. In case the client wants the Portfolio Manager to invest in the securities issued
by associated/related parties of Portfolio Manager and provides the consent for
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the same, the investments shall be subject to the following limits:
Security Limit for investment in Limit for investment across
single associate/related multiple associates/related
party (as percentage of parties (as percentage of
client’s AUM) client’s AUM)
Equity
Debt and hybrid securities
Equity + Debt + Hybrid
securities
6. In case of passive breach of investment limits (i.e., occurrence of instances not
arising out of omission and/or commission of Portfolio Manager) as decided at
paragraph 5 above, a rebalancing of the portfolio is required to be completed
by Portfolio Managers within a period of 90 days from the date of such breach.
However, the client may give an informed, prior positive consent to the Portfolio
Manager for a waiver from the requirement of rebalancing of the portfolio to
rectify the passive breach of investment limits. The client may choose not to
provide any waiver.
7. Please indicate consent or dissent as under:
Limits on investment
Consent: Portfolio Manager can invest in the securities of its
associates/related parties within the limits agreed upon at paragraph 5 above.
Dissent: Portfolio Manager cannot invest in the securities of its
associates/related parties.
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Waiver from rebalancing of portfolio on passive breach of investment limits
Consent: Portfolio Manager need not rebalance the portfolio on passive
breach of investment limits.
Dissent: Portfolio Manager should rebalance the portfolio on passive breach
of investment limits.
Signature of the client
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Annexure 4A: Illustration for Annexure on Fees and Charges84
This computation is for illustrative purpose only. Portfolio Managers may suitably
modify this to reflect their fees and charges.
The assumptions for the illustration are as follows:
a. Size of sample portfolio: ₹50 lacs85 over
b. Period: 1 year
c. Hurdle Rate: 10% of amount invested
d. Brokerage/ DP charges/ transaction charges: Weighted Average of such
charges (as a percentage of assets under management) levied in the past
year/ in case of new portfolio managers indicative charges as a percentage
of assets under management (e.g. 2%)
e. Management fee (e.g. 2%)
f. Performance fee (e.g. 20% of profits over hurdle rate)
g. The frequency of calculating all fees is annual.
Portfolio performance: Gain of 20%
Nature of Fees Amount in ₹ Amount in ₹
Capital Contribution 50,00,00086
Less: Any other fees (please enumerate) XX
Assets under Management 50,00,000
Add: Profits on investment during the year @
20% on assets under management 10,00,000
Gross value of the portfolio at the end of the 60,00,000
year
Less: Brokerage/DP charges/any other 1,00,000
similar charges (e.g. 2% of ₹50,00,000)
Less: Management Fees (if any) (e.g. 2% of 1,00,000
₹50,00,000)
Less: Performance fees (if any) (e.g 20% of 1,00,000
₹5,00,000 – working given below) XX
Less: Any other fees (please enumerate)
84 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
85 Clause 3 (v) of SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
86 Illustration has been suitably updated to consider minimum investment amount of ₹50 lakh.
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Total charges during the year 3,00,000
Net value of the portfolio at the end of the 57,00,000
year
% change over capital contributed 14.00%
Calculation of Performance Fees for above
Serial Nature of Fees Amount in ₹
A Profit for the year 10,00,000
B Less: Minimum profit level (Hurdle Rate @10% on 5,00,000
₹50,00,000)
C Amount on which Profit Sharing Fees to be 5,00,000
calculated (B-A)
D Performance Fees (@20% of C) 1,00,000
Portfolio performance: Loss of 20%
Nature of Fees Amount in ₹ Amount in ₹
Capital Contribution 50,00,000
Less: Any other fees (please enumerate) XX
Assets under Management 50,00,000
Less: Loss on investment during the year @
20% on assets under management 10,00,000
Gross value of the portfolio at the end of the 40,00,000
year
Less: Brokerage/DP charges/any other 1,00,000
similar charges (e.g. 2% of ₹50,00,000)
Less: Management Fees (if any) (e.g. 2% of 1,00,000
₹50,00,000) XX
Less: Performance fees (if any) XX
Less: Any other fees (please enumerate)
2,00,000
Total charges during the year
Net value of the portfolio at the end of the 38,00,000
year
% change over capital contributed (24.00%)
Charges on Portfolio performance: No change
Nature of Fees Amount in ₹ Amount in ₹
Capital Contribution 50,00,000
Less: Any other fees (please enumerate) XX
Assets under Management 50,00,000
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Add: Profits/Losses on investment during the
year @ 0% on assets under management 0
Gross value of the portfolio at the end of the 50,00,000
year
Less: Brokerage/DP charges/any other 1,00,000
similar charges (e.g. 2% of ₹50,00,000)
Less: Management Fees (if any) (e.g. 2% of 1,00,000
₹50,00,000) 0
Less: Performance fees (if any) XX
Less: Any other fees (please enumerate)
2,00,000
Total charges during the year
Net value of the portfolio at the end of the 48,00,000
year
% change over capital contributed (4.00%)
Note: The frequency of charging various fees may be specified for every type
of fees in the illustration
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Annexure 4B: Format of Investor Charter in Respect of Portfolio
Management Services
A. Vision and Mission Statements for investors.
Vision:
To implement diligently researched customised investment strategies which
help investors meet their long-term financial goals in a risk appropriate manner.
Mission:
To ensure that the Portfolio Management Services industry provides a viable
investment avenue for wealth creation by adopting high levels of skill, integrity,
transparency and accountability.
B. Details of business transacted by the organization with respect to the
investors.
a. appropriate risk profiling of investors
b. to provide Disclosure Document to investors
c. executing the PMS agreement
d. Making investment decisions on behalf of investors (discretionary) or
investment decisions taken at the discretion of the Investor (non-
discretionary) or advising investors regarding their investment decisions
(advisory), as the case may be.
C. Details of services provided to investors and estimated timelines:-
i. Discretionary & Non-Discretionary Portfolio Management Services (PMS):-
Under these services, all an investor has to do, is to give his portfolio in any
form i.e. in stocks or cash or a combination of both. The minimum size of the
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portfolio under the Discretionary and/ or Non-Discretionary Funds
Management Service should be Rs.50 lakhs as per the current SEBI
Regulations. However, the PMS provider reserves the right to prescribe a
higher threshold product-wise or in any other manner at its sole discretion.
The PMS provider will ascertain the investor’s investment objectives to
achieve optimal returns based on his risk profile. Under the Discretionary
Portfolio Management service, investment decisions are at the sole
discretion of the PMS provider if they are in sync with the investor’s
investment objectives. Under the Non-Discretionary Portfolio Management
service, investment decisions taken at the discretion of the Investor.
ii. Investment Advisory Services: -
Under these services, the Client is advised on buy/sell decision within the
overall profile without any back-office responsibility for trade execution,
custody of securities or accounting functions. The PMS provider shall be
solely acting as an Advisor to the Client and shall not be responsible for the
investment/divestment of securities and/or administrative activities on the
client’s portfolio. The PMS provider shall act in a fiduciary capacity towards
its Client and shall maintain arm’s length relationship with its other activities.
The PMS provider shall provide advisory services in accordance with
guidelines and/or directives issued by the regulatory authorities and/or the
Client from time to time in this regard.
iii. Client On-boarding
a. Ensuring compliance with KYC and AML guidelines.
b. franking & signing the Power of Attorney to make investment decisions
on behalf of the investor.
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c. opening demat account and funding of the same from the investor’s
verified bank account and/or transfer of securities from verified demat
account of the investor and
d. Mapping the said demat account with Custodian.
iv. Ongoing activities
a. To provide periodic statements to investors as provided under the PM
Regulations 2020 and other SEBI notifications and circulars (“PM
Regulations”) and
b. Providing each client an audited account statement on an annual basis
which includes all the details as required under the PM Regulations.
v. Fees and Expenses
Charging and disclosure of appropriate fees & expenses in accordance with
the PM Regulations.
vi. Closure and Termination
Upon termination of PMS Agreement by either party, the securities and the
funds lying in the account of the investor shall be transferred to the verified
bank account/ demat account of the investor.
vii. Grievance Redressal
Addressing in a time bound manner investor’s queries, service requests
and grievances, if any, on an ongoing basis.
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Timelines of the services provided to investors are as follows:
Sr. No. Service / Activity Timeline
1 Opening of PMS account 7 days from receipt of all requisite documents
(including demat account) for from the client, subject to review of the
residents. documents for accuracy and completeness by
portfolio manager and allied third party service
providers as may be applicable.
2 Opening of PMS account 14 days from receipt of all requisite documents
(including demat account) for from the client, subject to review of the
non-individual clients. documents for accuracy and completeness by
portfolio manager and allied third party service
providers as may be applicable.
3 Opening of PMS account 14 days from receipt of all requisite documents
(including demat account, bank from the client, subject to review of the
account and trading account) documents for accuracy and completeness by
for non-resident clients. portfolio manager and allied third party service
providers as may be applicable.
4 Registration of nominee in Registration of nominee should happen along
PMS account and demat with account opening, therefore turnaround
account. time should be same as account opening
turnaround time.
5 Modification of nominee in 10 days from receipt of requisite nominee
PMS account and demat modification form, subject to review of the
account. documents for accuracy and completeness by
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Sr. No. Service / Activity Timeline
portfolio manager and allied third party service
providers as may be applicable.
6 Uploading of PMS account in 10 days from date of account opening
KRA and CKYC database. (Portfolio Manager may rely on the custodian
for updating the same).
7 Whether portfolio manager is At the time of client signing the agreement; this
registered with SEBI, then information should be a part of the account
SEBI registration number. opening form and disclosure document.
8 Disclosure about latest Disclosure of portfolio manager's total AUM -
networth of portfolio manager monthly to SEBI
and total AUM. Disclosure of latest networth should be done in
the disclosure document whenever there are
any material changes.
9 Intimation of type of PMS At the time of client signing the agreement;
account – discretionary. this information should be a part of the
account opening form.
10 Intimation of type of PMS At the time of client signing the agreement;
account - non discretionary. this information should be a part of the
account opening form.
11 Intimation to client what At the time of client signing the agreement;
discretionary account entails this information should be a part of the
and powers that can be account opening form.
exercised by portfolio
manager.
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Sr. No. Service / Activity Timeline
12 Intimation to client what At the time of client signing the agreement;
nondiscretionary account this information should be a part of the
entails and powers that can be account opening form.
exercised by portfolio
manager.
13 Copy of executed PMS Within 3 days of client request.
agreement sent to client.
14 Frequency of disclosures of All details regarding client portfolios should be
available eligible funds. shared quarterly (point 26).
15 Issuance of funds and This data should be shared on a quarterly
securities balance statements basis or upon client request.
held by client.
16 Intimation of name and demat Within 3 days of PMS and demat account
account number of custodian opening.
for PMS account.
17 Conditions of termination of At the time of client signing the agreement;
contract. this information should be a part of the
account opening form.
18 Intimation regarding PMS fees At the time of client signing the agreement;
and modes of payment or this information should be a part of the
frequency of deduction. account opening form.
Page 91 of 175
Sr. No. Service / Activity Timeline
19 POA taken copy providing to Within 3 days of client request.
client.
20 Intimation to client about what At the time of client signing the agreement;
all transactions can portfolio this information should be a part of the
manager do using PoA. account opening form.
21 Frequency of providing Annual.
audited reports to clients
22 Explanation of risks involved in At the time of client signing the agreement;
investment. this information should be a part of the
account opening form.
23 Intimation of tenure of portfolio Indicative tenure should be disclosed at the
investments. time of client signing the agreement; this
information should be a part of the account
opening form.
24 Intimation clearly providing Negative list of securities should be taken from
restrictions imposed by the the client at the time of client signing the
investor on portfolio manager. agreement; this information should be a part of
the account opening form.
25 Intimation regarding settling of Settlement of funds and securities is done by
client funds and securities. the Custodian. The details of clients’ funds
and securities should be sent to the clients in
the prescribed format not later than on a
quarterly basis.
Page 92 of 175
Sr. No. Service / Activity Timeline
26 Frequency of intimation of Not later than on a quarterly basis or upon
transactions undertaken in clients' request.
portfolio account.
27 Intimation regarding conflict of The portfolio manager should provide details
interest in any transaction. of related party transactions and conflict of
interest in the Disclosure Document which
should be available on website of portfolio
manager at all times.
28 Timeline for providing The latest disclosure document should be
disclosure document to provided to investors prior to account opening
investor. and the latest disclosure documents should be
available on website of portfolio manager at all
times.
29 Intimation to investor about Within 3 days of PMS and demat account
details of bank accounts where
client funds are kept.
30 Redressal of investor Within 30 days, subject to all the information
grievances. required to redress the complaint is provided
by the complainant to the portfolio manager
Notes:
1. The number of days in the above timelines indicate clear working days
Page 93 of 175
D. Details of grievance redressal mechanism and how to access it
a. It is mandatory for every PMS provider to register itself on SEBI SCORES
(SEBI Complaint Redress System). SCORES is a centralised online
complaint resolution system through which the complainant can take up his
grievance against the PMS provider and subsequently view its status.
(https://scores.gov.in/scores/Welcome.html )
b. The details such as the name, address and telephone number of the investor
relations officer of the PMS provider who attends to the investor queries and
complaint should be provided in the PMS Disclosure document.
c. The grievance redressal and dispute mechanism should be mentioned in the
Disclosure Document.
d. Investors can approach SEBI for redressal of their complaints. On receipt of
complaints, SEBI takes up the matter with the concerned PMS provider and
follows up with them.
e. Investors may send their complaints to: Office of Investor Assistance and
Education, Securities and Exchange Board of India, SEBI Bhavan. Plot No.
C4-A, ‘G’ Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.
E. Expectations from the investors (Responsibilities of investors)
1. Check registration status of the intermediary from SEBI website before
availing services.
2. Submission of KYC documents and application form in a timely manner with
signatures in appropriate places and with requisite supporting documents.
3. Read carefully terms and conditions of the agreement before signing the
same.
Page 94 of 175
4. Thorough study of the Disclosure Documents of the PMS to accurately
understand the risks entailed by the said investment in PMS.
5. Accurate and sincere answers given to the questions asked in the ‘Risk
Questionnaire’ shall help the PMS provider properly assess the risk profile of
the investor.
6. Thorough study of the quarterly statements sent by the PMS provider to the
investor intimating him about the portfolio’s absolute and relative performance,
its constituents and its risk profile.
7. Ensure providing complete details of negative list of securities as part of
freeze instructions at the time of entering into PMS agreement and every time
thereafter for changes, if any, in a timely manner.
8. To update the PMS provider in case of any change in the KYC documents
and personal details and to provide the updated KYC along with the required
proof.
Page 95 of 175
Annexure 4C: Format for disclosure of Performance of the Portfolio Manager
(As per Regulation 22 (4) (e) of SEBI (Portfolio Managers) Regulations, 2020)
Page 96 of 175
Annexure 5A: Format for Monthly Report to SEBI
Report for the month of ________ FY _____
Type of Services Offered
Sl. No. Type of Service Offered Whether the service is offered
1 Discretionary Service Yes/No
2 Non-Discretionary Service Yes/No
3 Advisory Service Yes/No
4 Co-investment Service Yes/No
I. Data for Discretionary Services
A. Break-up of clients of the Portfolio Manager
Domestic Clients Foreign Clients
PF/ EPFO Corporates Non- Non FPI Others Total
Corporates Residents
Particulars
No. of unique Clients as on
last day of the month
Assets under Management
(AUM) as on last day of the
month
B. Break-up of assets under management of the Portfolio Manager
Investment Assets Under Management as on last day of the month (in INR crores)
Approach Equity Plain Debt Structured Debt Derivatives Mutual Others Total
Listed Unlisted Listed Unlisted Listed Unlisted Equity Commodity Others Funds
Approach 1
Approach 2
---
Approach
‘N’
Total
C. Funds Inflow/ Outflow
Investment Funds Inflow/Outflow in the Approach During the Funds Inflow/Outflow in the Approach During the FY
Approach Month
Page 97 of 175
Inflow during Outflow Net Inflow Inflow during the Outflow during Net Inflow (+ve)/
the month during the (+ve)/ Outflow FY since April 01 the FY since April Outflow (-ve)
(in INR crores) month (-ve) during the to ____ 01 to ____ during the FY since
(in INR crores) month (in INR crores) (in INR crores) April 01 to ____
(in INR crores) (in INR crores)
Approach 1
Approach 2
---
Approach
‘N’
Total
D. Transaction Data
Sl. No. Particulars Figures
1 Sales in the month (in INR crores )
2 Purchases in the month (in INR crores )
3 Portfolio Turnover Ratio = (Higher of Purchases or Sales in the month
/Average AUM)
Note: Average AUM to be computed based on daily average
E. Performance Data87
87 Updated vide SEBI Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022
Page 98 of 175
II. Data for Non- Discretionary Services
F. Break-up of clients of the Portfolio Manager
Domestic Clients Foreign Clients
PF/ Corporates Non- Non FPI Others Total
EPFO Corporates Residents
Particulars
No. of unique Clients
as on last day of the
month
Assets under
Management
(AUM) as on last
day of the month
G. Break-up of assets under management of the Portfolio Manager
Assets Under Management as on last day of the month (in INR crores)
Equity Plain Debt Structured Debt Derivatives Mutual Others Total
Funds
Listed Unlisted Listed Unlisted Listed Unlisted Equity Commodity Others
Page 99 of 175
H. Funds Inflow/ Outflow
Funds Inflow/Outflow During the Month Funds Inflow/Outflow During the FY
Inflow during Outflow during Net Inflow (+ve)/ Inflow during the FY Outflow during the FY Net Inflow (+ve)/
the month the month Outflow (-ve) since April 01 to ____ since April 01 to ____ Outflow (-ve) during the
(in INR crores) (in INR crores) during the month (in INR crores) (in INR crores) FY since April 01 to ____
(in INR crores) (in INR crores)
I. Transaction Data
Sl. No. Particulars Figures
1 Sales in the month (in INR crores )
2 Purchases in the month (in INR crores )
3 Portfolio Turnover Ratio = (Higher of Purchases or Sales in the month
/Average AUM)
Note: Average AUM to be computed based on daily average
J. Performance Data
Returns (%) Portfolio Turnover Ratio
AUM (in INR Cr)
1 month 1 year 1 month 1 year
III. Data for Advisory Services
K. Break-up of client base of the Portfolio Manager
Domestic Clients Foreign Clients
PF/ Corporates Non-Corporates Non FPI Others Total
Type of Client EPFO Residents
No. of unique Clients as on last
day of the month
Value of the Assets for which
Advisory Services are being
given (Amount in INR crores)
IV. Data for Co-investment Services
L. Break-up of clients of the Portfolio Manager
Page 100 of 175
Domestic Clients Foreign Clients
Corporates Non- Corporates Non Others
Total Clients
Type of Client Corporates Residents
No. of unique Clients as
on last day of the month
Value of the Assets for
which Co-investment
Services are being
given (Amount in INR
crores)
M. Break-up of assets under management of the Portfolio Manager
Funds Funds Assets Under Management as on last day of the month (in INR crores)
In- Out- Equity Plain Debt Structured Debt Others Total
flow flow
in the in the
month month
Note: AUM may be calculated on cost basis or in any manner as may be specified by SEBI
Page 101 of 175
V. Data on Complaints
Type of Client Total No. of complaints
Pending at the Received during Resolved during the Pending at the end of
beginning of the month month the month
the month
Domestic - PF/
EPFO
Domestic
Corporates
Domestic Non-
Corporates
Foreign – NR
Foreign – FPI
Foreign -Others
Total
Note: Data on investor complaints registered through SCORES or which are directly received by Portfolio Manager
to be provided
Page 102 of 175
Annexure 5B: Offsite Inspection Reporting Formats88
Certain fields are marked non-mandatory, however, Portfolio Managers shall submit such data if it is
available with them. Non-mandatory fields are marked as such to deal with specific use cases where such
data will not be available with Portfolio Managers, for instance, Custodian is not required for advisory
services of Portfolio Managers, however, Portfolio Managers providing Discretionary/Non-Discretionary
services shall provide custodian details.
1.1. PMS_Inspection_PM_Master
PMS_Master [<PMS_Master></PMS_Master>]
– Only one occurrence
# Tag Data Mandator Allowed Comments
Type y Character
1 <PM_NAME></PM_NAME> STRING Y Maximum length Name of Portfolio
allowed: 100 Manager
2 <PM_PAN> </PM_PAN> STRING Y Length allowed: PAN of Portfolio
10 Manager
3 <PM_PO_PAN> STRING Y Length allowed: PAN of Principle Officer
10
</PM_PO_PAN>
4 <PM_PO_NAME></PM_PO_NAME> STRING Y Maximum length Name of Principal
allowed: 100 Officer
88 Updated vide Master Circular for Portfolio Managers dated June 07, 2024
Page 103 of 175
# Tag Data Mandator Allowed Comments
Type y Character
5 <PM_SEBI_REG_NO></PM_SEBI_REG_NO> STRING Y Maximum length SEBI Reg. Number of
allowed: 20 Portfolio Manager
6 <PM_CO_PAN></PM_CO_PAN> STRING Y Length allowed: PAN of Compliance
10 Officer
7 <PM_CO_NAME></PM_CO_NAME> STRING Y Maximum length Name of Compliance
allowed: 100 Officer
8 <PO_NISM_CERTIFICATE_NO></PO_NISM_CER STRING N Maximum length Principal Officer's NISM
TIFICATE_NO> allowed: 20 Certificate Number
9 <PO_NISM_CERTIFIC_DATE></PO_NISM_CERTI DATE N YYYY-MM-DD Date of NISM certificate
FIC_DATE>
10 <FIU_REG_NO></FIU_REG_NO> STRING N Maximum length FIU Reg Number
allowed: 20
11 <KRA_REG_NO></KRA_REG_NO> STRING N Maximum length Institution code issued
allowed: 20 by KRA
In case of registration
with multiple KRA
agencies, provide any
one KRA agency
registration number
12 <CERSAI_REG_NO></CERSAI_REG_NO> STRING N Maximum length Institution code issued
allowed: 20 by CERSAI
Page 104 of 175
# Tag Data Mandator Allowed Comments
Type y Character
13 <SCORE_REG_NO></SCORE_REG_NO> STRING Y Maximum length SEBI SCORES
allowed: 20 registration number
14 <WEBLINK_FOR_DIRECT_CLIENT_ONBOARDIN STRING N Maximum length Web link for direct on-
G></WEBLINK_FOR_DIRECT_CLIENT_ONBOAR allowed: 500 boarding of client
DING>
15 <FO_SYSTEM_NAME></FO_SYSTEM_NAME> STRING N Maximum length Name of Front Office
allowed: 100 Trading System
16 <BO_SYSTEM_NAME></BO_SYSTEM_NAME> STRING N Maximum length Name of Back Office
allowed: 100 Accounting System or
Fund accountant
17 <PM_SURRENDER_DATE></PM_SURRENDER_ DATE N YYYY-MM-DD Date of approval of
DATE> application for surrender
by SEBI
18 <PM_NET_WORTH></PM_NET_WORTH> FLOAT Y DECIMAL(24,4) Net worth of PM as on
March 31 of the
preceding financial year
in INR. e.g. For report of
May-2023, Net worth as
on 31-03-2023 has to be
provided).
Till the time audited
Financial Statements
are not released,
Page 105 of 175
# Tag Data Mandator Allowed Comments
Type y Character
unaudited Net worth of
the previous Financial
Year may be reported.
e.g. For April-June 2024
reporting, if audited Net
Worth is not available,
unaudited Net Worth as
on March 31st, 2024 has
to be reported.
Page 106 of 175
1.2. PMS_Inspection_Client_Master
Client_Master [<Client_Master></Client_Master>]
– None or more occurrences allowed
Important Note:
 Kindly ensure that each of the UNIQUE_CLIENT_CODE, CLIENT_FOLIO_NO and CLIENT_BOID
combination should be uniquely identified in this report.
 No two entries for same UNIQUE_CLIENT_CODE, CLIENT_FOLIO_NO and CLIENT_BOID combination
should be present.
 2 entries of UNIQUE_CLIENT_CODE + CLIENT_FOLIO_NO + CLIENT_BOID , i.e., - one entry with BOID
NULL and another with valid BOID, shall not be considered as Valid.
# Tag Data Mandator Allowed Comments
Type y Character
1 <UNIQUE_CLIENT_CODE></UNIQUE_CLIENT STRING Y Maximum length Unique code for each investor
_CODE> allowed: 20 based on agreement and
holding nature. Mandatory if
account is active.
2 <CLIENT_FOLIO_NO> STRING N Maximum length Folio no. of the client. Provide
</CLIENT_FOLIO_NO> allowed: 20 Unique Client Code, if folio
no. not maintained. This value
cannot be NULL, if
CLIENT_BOID is not NULL.
3 <CLIENT_PAN> STRING Y Length allowed: Client PAN
</CLIENT_PAN> 10
Page 107 of 175
# Tag Data Mandator Allowed Comments
Type y Character
4 <CLIENT_BOID></CLIENT_BOID> STRING N Length allowed: BOID of the client. For
16 investors having investments
only in MF Units in SOA
format, BOID may not be
provided.
5 <CLIENT_CATEGORY></CLIENT_CATEGORY STRING Y Individual
> Resident
Individual Non
Resident
HUF
Corporate
Resident
Corporate Non-
Resident
Association of
Persons
Body of
Individuals
Partnership Firm
Limited Liability
Partnership
Trust
FPI
Other
5 <CLIENT_SUB_CATEGORY></CLIENT_SUB_ STRING Y General
CATEGORY> Accredited
Page 108 of 175
# Tag Data Mandator Allowed Comments
Type y Character
Large Value
Accredited
Co-investment
Not Applicable
7 <SERVICE_CATEGORY> STRING Y Discretionary
</SERVICE_CATEGORY> Non-Discretionary
Advisory
8 <CLIENT_FIRST_NAME></CLIENT_FIRST_NA STRING Y Maximum length
ME> allowed: 100
9 <CLIENT_MIDDLE_NAME></CLIENT_MIDDLE STRING N Maximum length
_NAME> allowed: 35
10 <CLIENT_LAST_NAME></CLIENT_LAST_NAM STRING N Maximum length
E> allowed: 35
11 <CLIENT_ADDRESS></CLIENT_ADDRESS> STRING Y Maximum length
allowed: 300
12 <CLIENT_CITY></CLIENT_CITY> STRING N Maximum length
allowed: 100
13 <CLIENT_STATE></CLIENT_STATE> STRING N Maximum length
allowed: 35
14 <CLIENT_PINCODE></CLIENT_PINCODE> INT N Length allowed: 4
to 6
Page 109 of 175
# Tag Data Mandator Allowed Comments
Type y Character
15 <CLIENT_COUNTRY></CLIENT_COUNTRY> STRING N Maximum length
allowed: 35
16 <CLIENT_PRIMARY_MOBILE_NO></CLIENT_ STRING N Length allowed: 7 Please specify STD/ISD
PRIMARY_MOBILE_NO> to 15 Codes. Acceptable pattern is
as follows:
1st char (optional)-> + or 0
2nd char -> 1 – 9
3rd char onwards -> 0 - 9
Acceptable values are:
+123456
1234567
0123456789
Not acceptable:
00123456
+012345678
17 <CLIENT_EMAIL> STRING N Maximum length
allowed: 100
</CLIENT_EMAIL>
18 <JOINT_HOLDER_1_NAME></JOINT_HOLDE STRING N Maximum length Second Holder name (Joint
R_1_NAME> allowed: 150 holder 1), mandatory if mode
of holding is joint
Page 110 of 175
# Tag Data Mandator Allowed Comments
Type y Character
19 <JOINT_HOLDER_1_PAN></JOINT_HOLDER_ STRING N Length allowed: Joint Holder 1 PAN,
1_PAN> 10 mandatory if mode of holding
is joint
20 <JOINT_HOLDER_2_NAME></JOINT_HOLDE STRING N Maximum length Third Holder name (Joint
R_2_NAME> allowed: 150 Holder 2), mandatory if mode
of holding is joint and 2
holders are there
21 <JOINT_HOLDER_2_PAN> STRING N Length allowed: Joint Holder 2 PAN,
</JOINT_HOLDER_2_PAN> 10 mandatory if mode of holding
is joint and 2 holders are
there
22 <HOLDING_NATURE></HOLDING_NATURE> STRING Y Single SINGLE
Anyone or Survior
ANYONE OR SURVIOR
Joint
First or Survior JOINT
Not Applicable
FIRST OR SURVIOR
NOT APPLICABLE (FOR
NON INDIVIDUALS)
23 <NOMINEE_1_NAME></NOMINEE_1_NAME> STRING N Maximum length
allowed: 100
24 <NOMINEE_1_PAN_NO> STRING N Length allowed:
</NOMINEE_1_PAN_NO> 10
Page 111 of 175
# Tag Data Mandator Allowed Comments
Type y Character
25 <NOMINEE_2_NAME></NOMINEE_2_NAME> STRING N Maximum length
allowed: 100
26 <NOMINEE_2_PAN_NO> STRING N Length allowed:
</NOMINEE_2_PAN_NO> 10
27 <NOMINEE_3_NAME></NOMINEE_3_NAME> STRING N Maximum length
allowed: 100
28 <NOMINEE_3_PAN_NO> STRING N Length allowed:
</NOMINEE_3_PAN_NO> 10
29 <FIRST_HOLDER_GENDER></FIRST_HOLDE STRING N Male
R_GENDER> Female
Other
NA
30 <FIRST_HOLDER_DOB>/FIRST_HOLDER_DO DATE N YYYY-MM-DD Date of Birth of First holder
B>
For non-individuals, date of
incorporation will be captured
wherever available
31 <FIRST_HOLDER_NATIONALITY></FIRST_H STRING N Maximum length Nationality of First holder
OLDER_NATIONALITY> allowed: 40
32 <FIRST_HOLDER_OCCUPATION></FIRST_H STRING N Maximum length Occupation of First Holder
OLDER_OCCUPATION> allowed: 100
Page 112 of 175
# Tag Data Mandator Allowed Comments
Type y Character
33 <DATE_OF_PMS_ACCOUNT_ACTIVATION></ DATE N YYYY-MM-DD PMS Account Activation date
DATE_OF_PMS_ACCOUNT_ACTIVATION>
34 <IS_ACCOUNT_ACTIVE></IS_ACCOUNT_ACT BOOL Y true Active Account – True
IVE>
false Inactive Account – False
Examples of inactive
accounts:
 UCC created but funds
not received.
 Full Redemption
request received, but
full and final settlement
is pending.
 Insufficient funds and
client not reachable
35 <INACTIVE_SINCE></INACTIVE_SINCE> DATE N YYYY-MM-DD Mandatory for inactive
accounts. If account inactive
on account of complete
withdrawal of funds, the date
as mentioned written request
has to be mentioned.
36 <ACCOUNT_INACTIVITY_DESC> STRING N Maximum length Reason for tagging account
</ACCOUNT_INACTIVITY_DESC> allowed: 200 as inactive.
Page 113 of 175
# Tag Data Mandator Allowed Comments
Type y Character
Reasons may be one of the
below:
1. Insufficient funds and
client not reachable
2. Demat account opened
but no initial fund
transfer.
3. Written instruction
received for complete
redemption of funds.
4. Others – please
specify
The date of full and final
37 <DATE_OF_PMS_ACCOUNT_CLOSURE></DA DATE N YYYY-MM-DD
settlement shall be reported as
TE_OF_PMS_ACCOUNT_CLOSURE>
Account Closure Date.
Page 114 of 175
1.3. PMS_Inspection_Client_Folio_Master
Client_Folio [<Client_Folio></Client_Folio>] – None or more occurrences allowed
Important Note:
 Kindly ensure that each of the UNIQUE_CLIENT_CODE, CLIENT_FOLIO_NO and CLIENT_BOID
combination entered in this report should exactly match with some entry of UNIQUE_CLIENT_CODE,
CLIENT_FOLIO_NO and CLIENT_BOID combination present in the CLIENT_MASTER report.
 Also, ensure that each of the UNIQUE_CLIENT_CODE, CLIENT_FOLIO_NO and CLIENT_BOID
combination should be uniquely identified in this report.
 No two entries for same UNIQUE_CLIENT_CODE, CLIENT_FOLIO_NO and CLIENT_BOID combination
should be present.
# Tag Data Mandator Allowed Comments
Type y Character
1 <UNIQUE_CLIENT_CODE></UNIQUE_CLIENT_C STRING Y Maximum length Unique code for each
ODE> allowed: 20 investor based on
agreement and holding
nature (i.e.
single/joint/etc.)
2 <CLIENT_FOLIO_NO></CLIENT_FOLIO_NO> STRING Y Maximum length Folio no. of the client.
allowed: 20 Provide Unique Client
Code, if folio no. not
maintained.
3 <AGREEMENT_DATE></AGREEMENT_DATE> DATE Y YYYY-MM-DD Date of agreement
Page 115 of 175
# Tag Data Mandator Allowed Comments
Type y Character
4 <INVESTMENT_APPROACH></INVESTMENT_AP STRING N Maximum length Name of Investment
PROACH> allowed: 50 Approach
5 <INVESTMENT_STRATEGY></INVESTMENT_ST STRING Y Equity
RATEGY>
Debt
Hybrid
Multi
6 <BENCHMARK></BENCHMARK> STRING Y Maximum length BENCHMARK INDEX
allowed: 50 selected by PM for the
strategy. Benchmark
Index names to be given
exactly as provided by
the index provider.
7 <CLIENT_BOID></CLIENT_BOID> STRING N Length allowed: BOID of the client. For
16 investors having
investments only in MF
Units in SOA format,
BOID may not be
provided.
8 <CUSTODIAN_REG_NO></CUSTODIAN_REG_N STRING N Maximum length SEBI Registration
O> allowed: 20 Number of Custodian.
Mandatory for
Discretionary/Non-
Discretionary services.
Page 116 of 175
# Tag Data Mandator Allowed Comments
Type y Character
9 <CUSTODIAN_NAME></CUSTODIAN_NAME> STRING N Maximum length Name of Custodian.
allowed: 100 Mandatory for
Discretionary/Non-
Discretionary services.
10 <IS_POWER_OF_ATTORNEY_EXECUTED></IS_ BOOL Y TRUE Power of Attorney
POWER_OF_ATTORNEY_EXECUTED> executed in favour of PM
FALSE
11 <IS_PERMISSION_INVST_IN_ASSOCIATES></IS BOOL Y TRUE Whether client has given
_PERMISSION_INVST_IN_ASSOCIATES> permission for
FALSE
investments in
associates/related parties
12 <PERCENTAGE_INDIVIDUAL_EQUITY_CONSEN FLOAT N DECIMAL(5,2) Percent of AUM which
T></PERCENTAGE_INDIVIDUAL_EQUITY_CONS can be invested by PM in
ENT> the equity shares of one
associate/related party.
Only required if value is
true in #11.
13 <PERCENTAGE_TOTAL_EQUITY_CONSENT></P FLOAT N DECIMAL(5,2) Percent of AUM which
ERCENTAGE_TOTAL_EQUITY_CONSENT> can be invested by PM in
the equity shares of all its
associate/related party.
Only required if value is
true in #11.
Page 117 of 175
# Tag Data Mandator Allowed Comments
Type y Character
14 <PERCENTAGE_INDIVIDUAL_DEBT_CONSENT> FLOAT N DECIMAL(5,2) Percent of AUM which
</PERCENTAGE_INDIVIDUAL_DEBT_CONSENT can be invested by PM in
> the debt and hybrid
securities of one
associate/related party.
Only required if value is
true in #11.
15 <PERCENTAGE_TOTAL_DEBT_CONSENT></PE FLOAT N DECIMAL(5,2) Percent of AUM which
RCENTAGE_TOTAL_DEBT_CONSENT> can be invested by PM in
the debt and hybrid
securities of all its
associate/related party.
Only required if value is
true in #11.
16 <PERCENTAGE_TOTAL_LIMIT_CONSENT></PE FLOAT N DECIMAL(5,2) Percent of AUM which
RCENTAGE_TOTAL_LIMIT_CONSENT> can be invested by PM in
the equity, debt and
hybrid securities of all its
associate / related party.
Only required if value is
true in #11.
17 <IS_CONSENT_REBALANCE_PASSIVE></IS_CO BOOL Y TRUE Consent: need not
NSENT_REBALANCE_PASSIVE> rebalance the portfolio on
FALSE
passive breach – true
Page 118 of 175
# Tag Data Mandator Allowed Comments
Type y Character
Need to rebalance the
portfolio on passive
breach – false
Only required if value is
true in #11.
18 <IS_CONSENT_INVST_IN_EQUITY_DERIVATIVE BOOL Y TRUE Consent for investment in
> Equity Derivatives
FALSE
</IS_CONSENT_INVST_IN_EQUITY_DERIVATIVE
>
19 <IS_CONSENT_INVST_IN_COMMODITY_DERIVA BOOL Y TRUE Consent for investment in
TIVE> Commodity Derivatives
FALSE
</IS_CONSENT_INVST_IN_COMMODITY_DERIV
ATIVE>
20 <PERCENTAGE_DERIVATIVE_CONSENT></PER FLOAT Y DECIMAL(5,2) Percent of AUM which
CENTAGE_DERIVATIVE_CONSENT> can be invested in
derivatives
21 <CLIENT_CUSTODIAN_CODE></CLIENT_CUSTO STRING Y Maximum length Custodian code of the
DIAN_CODE> allowed: 20 client
22 <PM_DISTRIBUTOR_NAME></PM_DISTRIBUTO STRING N Maximum length Name of the Distributor
R_NAME> allowed: 100
23 <PM_DISTRIBUTOR_PAN> STRING N Length allowed: PAN of the Distributor
10
<Is_Valid_PAN></Is_Valid_PAN>
Page 119 of 175
# Tag Data Mandator Allowed Comments
Type y Character
</PM_DISTRIBUTOR_PAN>
24 <PERFORMANCE_FEE_DESCRIPTION></PERF STRING Y Maximum length Mode of charging
ORMANCE_FEE_DESCRIPTION> allowed: 100 performance fees in
description
25 <PERCENTAGE_PERFORMANCE_FEE></PERC FLOAT Y DECIMAL(5,2) Performance fees
ENTAGE_PERFORMANCE_FEE> percentage
Page 120 of 175
1.4. PMS_Inspection_Client_Folio_AUM
Client_Folio_AUM [<Client_Folio_AUM></Client_Folio_AUM>]
– None or more occurrences allowed
Important Note: Kindly ensure that each of the UNIQUE_CLIENT_CODE and CLIENT_FOLIO_NO
combination entered in this report should exactly match with some entry of UNIQUE_CLIENT_CODE and
CLIENT_FOLIO_NO present in the CLIENT_FOLIO_MASTER Report.
# Tag Data Mandatory Allowed Comments
Type Character
1 <AUM_DATE></AUM_DATE> DATE Y YYYY-MM-DD
2 <UNIQUE_CLIENT_CODE></UNIQUE_CLIENT_CODE> STRING Y Maximum Unique client code
length allowed:
20
3 <CLIENT_FOLIO_NO></CLIENT_FOLIO_NO> STRING Y Maximum Folio no. of the client for
length allowed: which AUM is provided.
20 Provide Unique Client
Code, if folio no. not
maintained.
4 <CLIENT_FOLIO_UNITS></CLIENT_FOLIO_UNITS> FLOAT N DECIMAL(24,4) No. of units under the
folio if units are
maintained by PMS
5 <CLIENT_FOLIO_AUM></CLIENT_FOLIO_AUM> FLOAT Y DECIMAL(24,4) AUM of the folio in INR.
For holidays and
weekends, provide AUM
Page 121 of 175
of preceding working
day.
Page 122 of 175
1.5. PMS_Inspection_Client_Cap_Transactions
Client_Cap_Transactions [<Client_Cap_Transactions></Client_Cap_Transactions>]
– None or more occurrences allowed
Important Note: Kindly ensure that each of the UNIQUE_CLIENT_CODE and CLIENT_FOLIO_NO
combination entered in this report should exactly match with some entry of UNIQUE_CLIENT_CODE and
CLIENT_FOLIO_NO present in the CLIENT_FOLIO_MASTER report
# Tag Data Mandatory Allowed Comments
Type Character
1 <UNIQUE_CLIENT_CODE></UNIQUE_CLIENT_CODE> STRING Y Maximum Unique client code
length allowed:
20
2 <CLIENT_FOLIO_NO></CLIENT_FOLIO_NO> STRING Y Maximum Folio no. of the client.
length allowed: Provide Unique Client
20 Code, if folio no. not
maintained.
3 STRING Y Initial Inflow * Please see note
<TRANSACTION_TYPE></TRANSACTION_TYPE>
Top Up below.
Partial
Redemption All redemption
Full Redemption transactions after
Interest/Dividend receipt of account
Pay-in closure/ deactivation/
Interest/Dividend transmission date
Pay-out shall be tagged as
Full Redemption,
Page 123 of 175
# Tag Data Mandatory Allowed Comments
Type Character
Tax Liability even if the proceeds
(TDS or IT for are transferred in
NRI) tranches.
Switch-in
Switch-out
4 <TRANSACTION_DATE></TRANSACTION_DATE> DATE Y YYYY-MM-DD Date on which
transaction processed
5 <TRANSACTION_AMOUNT></TRANSACTION_AMOUNT> FLOAT Y DECIMAL(24,4) Value of transaction
in INR
6 <TRANSACTION_UNITS></TRANSACTION_UNITS> FLOAT N DECIMAL(24,4) Number of units, if
units are maintained
by the PMS
7 <EXIT_LOAD></EXIT_LOAD> FLOAT N DECIMAL(20,4) Exit load charged by
the PMS in
percentage
(Mandatory in case of
Full
Redemption/Partial
Redemption)
Page 124 of 175
1.6. PMS_Inspection_Client_Expense_Master
Client_Expense <Client_Expense></Client_Expense>]
– None or more occurrences allowed
Important Note:
1. Kindly ensure that each of the UNIQUE_CLIENT_CODE and CLIENT_FOLIO_NO combination entered
in this report should exactly match with some entry of UNIQUE_CLIENT_CODE and
CLIENT_FOLIO_NO present in the CLIENT_FOLIO_MASTER Report.
2. For ease of reporting, a single entry for each expense sub-type per client per month may be reported
with ACCRUAL_DATE as the last date of the month for which the report is being submitted.
# Tag Data Mandatory Allowed Comments
Type Character
1 <ACCRUAL_DATE></ ACCRUAL _DATE> DATE Y YYYY-MM-DD Date of the expense
charged
2 <UNIQUE_CLIENT_CODE></UNIQUE_CLIENT_CODE> STRING Y Maximum Unique client code
length allowed:
20
3 <CLIENT_FOLIO_NO></CLIENT_FOLIO_NO> STRING Y Maximum Folio Number of the
length allowed: client. Provide Unique
20 Client Code, if folio no.
not maintained.
4 <EXPENSE_TYPE></EXPENSE_TYPE> STRING Y PMS Fees
Operating Fees
Page 125 of 175
# Tag Data Mandatory Allowed Comments
Type Character
5 <EXPENSE_SUB_TYPE></EXPENSE_SUB_TYPE> STRING Y Management In case of PMS Fees,
Fees (fixed) either Management Fees
(fixed) or Performance
Performance
Fees (variable) or Exit
Fees (variable)
Load.
Exit Load
Account
Opening
Charges In case of Operating
(including Expenses: (Account
stamp duty) Opening charges
including stamp duty /
Audit Fee
Audit Fee / Bank charges
Bank Charges / Fund Accounting
charges / Custody Fee /
Fund
Demat charges / Broking
Accounting
Fees or other
Charges
miscellaneous expense)
Custody Fee
Demat Charges
Broking Fees
Other
Miscellaneous
Expense
Page 126 of 175
# Tag Data Mandatory Allowed Comments
Type Character
6 <EXPENSE_VALUE></EXPENSE_VALUE> FLOAT Y DECIMAL(20,4) Amount of the expense
charged in INR
Page 127 of 175
1.7. PMS_Inspection_Client_Holding_Master
Client_Holding [<Client_Holding></Client_Holding>] – None or more occurrences allowed
Important Note:
1. Kindly ensure that each of the UNIQUE_CLIENT_CODE and CLIENT_FOLIO_NO combination entered
in this report should exactly match with some entry of UNIQUE_CLIENT_CODE and
CLIENT_FOLIO_NO present in the CLIENT_FOLIO_MASTER report.
2. All holding/positions except listed equity is required to be reported.
# Tag Data Mandator Allowed Character Comments
Type y
1 <HOLDING_DATE></HOLDING_DATE> DATE Y YYYY-MM-DD Holding date.
For holidays and
weekends, provide
holdings of preceding
working day.
2 <UNIQUE_CLIENT_CODE></UNIQUE_CLIEN STRING Y Maximum length Unique code for each
T_CODE> allowed: 20 investor based on
agreement and holding
nature
3 <CLIENT_FOLIO_NO></CLIENT_FOLIO_NO> STRING Y Maximum length Folio no. of the client.
allowed: 20
Provide Unique Client
Code, if folio no. not
maintained.
Page 128 of 175
# Tag Data Mandator Allowed Character Comments
Type y
4 <INVESTMENT_TYPE></INVESTMENT_TYPE STRING Y Equity
> Debt
Derivatives
Mutual Fund
Other
5 <ASSET_TYPE></ASSET_TYPE> STRING Y Equity Shares Asset Type
Plain Debt (For Equity - Equity
Structured Debt Shares
Futures For Debt - Plain Debt,
Options Structured Debt
MF Units For Derivatives - Futures,
Overseas Units Options
REIT For Mutual Funds - MF
InVIT Units, Overseas Units
Cash For Other – Cash, REIT,
Other INVIT, Other)
6 <ISSUER_NAME></ISSUER_NAME> STRING N Maximum length Issuer name
allowed: 100
7 <SECURITY_NAME></SECURITY_NAME> STRING N Maximum length Name of the security
allowed: 100
8 <SECURITY_ISIN></SECURITY_ISIN> STRING N Length allowed: 12 ISIN of security.
Page 129 of 175
# Tag Data Mandator Allowed Character Comments
Type y
For derivatives, provide
ISIN of underlying
security.
9 <SECURITY_CODE></SECURITY_CODE> STRING N Maximum length Internal code of the
allowed: 20 security for which there is
no ISIN.
10 <IS_SECURITY_ASSOCIATED></IS_SECURI BOOL Y TRUE If security is of associate/
TY_ASSOCIATED> related party
FALSE
11 <IS_SECURITY_LISTED></IS_SECURITY_LIS BOOL Y TRUE If security is listed
TED>
FALSE
12 <SECURITY_RATING> STRING N REFER Security rating mandatory
</SECURITY_RATING> ANNEXURE-A in case of Debt/ Hybrid
securities
13 <RATING_AGENCY> </RATING_AGENCY> STRING N REFER Rating agency mandatory
ANNEXURE-B for debt / hybrid securities
14 <QUANTITY></QUANTITY> FLOAT N DECIMAL(30,6) Quantity
15 <UNIT_PRICE></UNIT_PRICE> FLOAT N DECIMAL(30,6) Market Price or valuation
price of the security in INR
16 <MARKET_VALUE></MARKET_VALUE> FLOAT N DECIMAL(30,6) Market Value of securities
in INR
Page 130 of 175
# Tag Data Mandator Allowed Character Comments
Type y
17 <MATURITY_DATE></MATURITY_DATE> DATE N YYYY-MM-DD Maturity Date (in case of
debt instrument)
18 <OPTION_TYPE></OPTION_TYPE> STRING N Put Option Type (Call or Put)
Call
Page 131 of 175
1.8. PMS_Inspection_PM_Operating_Expense
PMS_Expense [<PMS_Expense></PMS_Expense>]
– None or more occurrences allowed
Important Note: For ease of reporting, for each nature of service, a single entry with aggregate amount
per vendor per month may be reported with ACCRUAL_DATE as the last date of the month for which the
report is being submitted.
# Tag Data Mandator Allowed Comments
Type y Character
1. <ACCRUAL_DATE></ACCRUAL_DATE> DATE Y YYYY-MM-DD Date of booking the
expense
2. <VENDOR_PAN> STRING Y Length allowed: PAN of the vendor from
10 whom the service taken
<Is_Valid_PAN></Is_Valid_PAN>
</VENDOR_PAN>
3. <VENDOR_NAME></VENDOR_NAME> STRING Y Maximum length Name of the vendor from
allowed: 100 whom the service taken
4. <NATURE_OF_SERVICE></NATURE_OF_SERVI STRING Y Broking
CE> Custody
DP
Fund Accounting
RTA
Distributor Comm
Other
Page 132 of 175
# Tag Data Mandator Allowed Comments
Type y Character
5. <IS_VENDOR_ASSOCIATE_OF_PMS></IS_VEND BOOL Y TRUE Whether the vendor is
OR_ASSOCIATE_OF_PMS> FALSE associate of PMS
6. <AMOUNT_PAID></AMOUNT_PAID> FLOAT Y DECIMAL(24,4) Amount paid in INR
7. <FREQUENCY></FREQUENCY> STRING Y Monthly
Quarterly
Yearly
Other
Page 133 of 175
1.9. PMS_Inspection_PM_Pool_Acc_Master
PMS_PoolAcc [<PMS_PoolAcc></PMS_PoolAcc>]
– None or more occurrences allowed
Important Note: Kindly ensure that each of the POOL_BOID should be uniquely identified in this report.
No two entries for same POOL_BOID should be present.
# Tag Data Mandatory Allowed Character Comments
Type
1 <POOL_DP_ID></POOL_DP_ID> STRING Y Maximum length allowed: Pool DP ID
20
2 <POOL_DP_NAME></POOL_DP_NAME> STRING Y Maximum length allowed: Pool Name of
100 DP
3 <POOL_NAME> </POOL_NAME> STRING Y Maximum length allowed: Pool Account
100 title
4 <POOL_BOID></POOL_BOID> STRING Y Length allowed: 16 Pool BOID
Page 134 of 175
1.10. PMS_Inspection_PM_Associated_Security_Details
PMS_Asctd_Sec_Dtls [<PMS_Asctd_Sec_Dtls></PMS_Asctd_Sec_Dtls>]
– None or more occurrences allowed
Important Note:
All listed equity shares in which the Portfolio Manager has invested client’s funds has to be reported for
every date of the reporting month on which:
 the issuer of the security was an associate of the Portfolio Manager (as specified in sub-section (6)
of section 2 of the Companies Act, 2013) or,
 the issuer of the security was related to Portfolio Manager as per the definition provided in
Regulation 2(1)(pa) of the SEBI (Portfolio Managers) Regulations, 2020.
# Tag Data Type Mandatory Allowed Character Comments
1 < INVESTMENT_TYPE></ STRING Y Equity Investment Type
INVESTMENT_TYPE>
Derivatives
2 < ASSET_TYPE></ ASSET_TYPE> STRING Y Equity Shares Asset Type
(For Equity: Equity
Futures
Shares
Options
For Derivative:
Futures or Options)
3 < SECURITY_ISIN></ SECURITY_ISIN> STRING N Maximum length ISIN of security.
allowed: 12
Page 135 of 175
4 < SECURITY_CODE></ SECURITY_CODE> STRING N Maximum length Internal code of the
allowed: 20 security for which
there is no ISIN.
5 < ASSOCIATED_DATE></ DATE Y YYYY-MM-DD
ASSOCIATED_DATE>
Page 136 of 175
ALLOWED VALUES
Allowed values for Ratings
AAA AA+ AA AA- A+ A
A- BBB+ BBB BBB- BB+ BB
BB- B+ B B- C+ C
C- A1+ A1 A2+ A2 A3+
A3 A4+ A4 Privately Rated Sovereign Unrated
AAA(SO) AA+(SO) AA(SO) AA-(SO) A+(SO) A(SO)
A-(SO) BBB+(SO) BBB(SO) BBB-(SO) BB+(SO) BB(SO)
BB-(SO) B+(SO) B(SO) B-(SO) C+(SO) C(SO)
C-(SO) D(SO) AAA(CE) A1+(SO) A1(SO) A2+(SO)
A2(SO) A3+(SO) A3(SO) A4+(SO) A4(SO) AA+(CE)
AA(CE) AA-(CE) A+(CE) A(CE) A-(CE) BBB+(CE)
BBB(CE) BBB-(CE) BB+(CE) BB(CE) BB-(CE) B+(CE)
B(CE) B-(CE) C+(CE) C(CE) C-(CE) D(CE)
A1+(CE) A1(CE) A2+(CE) A2(CE) A3+(CE) A3(CE)
A4+(CE) A4(CE) D
Page 137 of 175
Allowed values for Rating Agency
CARE CRISIL ICRA
FITCH BWR IVR
ACUITE IND SMERA
Sovereign Unrated
Page 138 of 175
Annexure 5C: Details of reporting requirements as per the provisions of the
Master Circular
Details of the requirements prescribed under various clauses of this Master Circular
that are covered through the offsite inspection reporting formats, are as under:
Paragraph Requirement Table Reference
No.
2.3.3 At the time of on-boarding of clients directly, no Client Master, Client Folio
charges except statutory charges shall be levied. Master and Client Expense
Master
2.5.1.1 The first single lump-sum investment amount Client Master and Client
received as funds or securities from clients should Capital Transaction
not be less than Rs.50 Lakh
3.2.2 Portfolio Managers can invest in derivatives on the Client Folio Master
terms specified in the Portfolio Management
Agreement.
3.2.3 The total exposure of the portfolio client in Client Folio AUM and Client
derivatives should not exceed his portfolio funds Holding Master
placed with the Portfolio Manager
3.3.2.3 Portfolio Managers may participate in Exchange Client Folio Master
Traded Commodity Derivatives after entering into
an agreement with the clients.
3.4.2 Portfolio Manager shall invest up to a maximum of Client Folio Master, Client
30 percent of their client’s portfolio (as a Folio AUM and Client
percentage of the client’s assets under Holding Master
management) in the securities of their own
associates/related parties.
3.6.2 Portfolio Managers offering discretionary portfolio Client Holding Master
management services shall not make any
investment in below investment grade securities.
3.6.3 Portfolio Managers offering non-discretionary Client Folio AUM and Client
portfolio management services shall not make any Holding Master
investment in below investment grade listed
securities. However, Portfolio Manager may invest
up to 10% of the assets under management of such
clients in unlisted unrated securities of issuers
other than associates/related parties of Portfolio
Manager.
Page 139 of 175
Paragraph Requirement Table Reference
No.
6.1.3.3 Operating expenses excluding brokerage, over Client Folio AUM and Client
and above the fees charged for Portfolio Expense Master
Management Service, shall not exceed 0.50% per
annum of the client's average daily AUM.
6.1.3.4 Charges for all transactions in a financial year PM Level Expense Master
(Broking, Demat, custody etc.) through self or
associates shall be capped at 20% by value per
associate (including self) per service.
6.1.3.6 Profit/ performance shall be computed on the basis Client Expense Master
of high water mark principle over the life of the
investment, for charging of performance / profit
sharing fee.
6.1.4.1 Exit Load levied by PMS Client Capital Transaction
Page 140 of 175
Annexure 5D: Format of Quarterly Reporting to Client
Account Statement for Quarter ended ___________
Email ID:_________
Tel Number:________
Name of Distributor:_________
A. Account Overview:
Name of the Client*
PAN*
Address
Email
Phone number
Unique Client Code
Account Activation date
Type of Portfolio Management Service
Investment approach for the account
Benchmark for the investment approach
Amount managed under the Investment
Approach
% AUM under investment approach
Notes:
(i) If multiple investment approaches are used for management of the client
account, separate reports may be used for each such Investment Approach.
(ii) Details of joint holder, if applicable, needs to be provided
(iii) In case of Clients coming from Direct plan, provide input as “Direct Plan” under
head Name of Distributor
(iv) For any request for change of facts as appearing above, kindly get in touch with
[Email ID] or [Phone Number]
Page 141 of 175
(v) AUM reported shall be the total assets managed by the Portfolio Manager for
the particular Client PAN
(vi) Inputs with regards to investment approach and benchmark may not be
applicable for Co-investment services
B. Portfolio Details:
Portfolio Allocation
Type of Security Purchase Value Market Value (as on % of Assets Under
quarter end) Management
(in Rs) (in Rs)
Equity
Plain Debt
Structured Debt
Equity Derivatives
Commodity
Derivatives
Goods
Mutual Funds
Cash and equivalent
Other Assets
Total
Note:
(i) Portfolio Managers offering Co-investment services, may provide details as
applicable, for assets permitted to be managed by them.
Portfolio Summary
Particulars (in Rs)
Portfolio Value at the beginning of quarter
Portfolio Value at the end of quarter
Page 142 of 175
For the quarter
1. Capital Inflow
2. Capital Outflow
3. Interest Income
4. Dividend Income
5. Other Income
6. Management Fee
7. Performance Fee
8. Expenses at actuals
9. Other expenses
10. Realized Gain/ Loss
11. Unrealized Gain/ Loss
Commission paid to Distributor
Brokerage paid
Note:
(i) Portfolio Managers offering Co-investment services, may provide details as
applicable
C. Performance of Portfolio
Disclaimer: Performance data for Portfolio Manager and Investment
Approach provided hereunder is not verified by any regulatory authority.
Performance report for Client Portfolio and Investment Approach
Particulars 1 Year 3 Years 5 Years 10 Years Since Inception
Returns of Client Portfolio
Aggregate Returns of Investment Approach
Benchmark Performance
Notes:
(i) The above returns to be calculated using Time Weighted rate of return (TWRR).
While computing returns of Investment Approach under which the Client
Page 143 of 175
account is managed, all clients falling under said Investment Approach during
the relevant period have to be taken into consideration
(ii) All investments including cash and cash equivalents to be considered for
calculation of returns
(iii) In case of a Portfolio Managers offering Co-investment services, performance
of portfolio may be calculated and disclosed, as agreed between the Co-
investment Portfolio Manager and the co-investor
D. Transaction Details:
(i) Capital Contribution (from inception till end of reporting period)
Date Capital Inflow Capital Outflow
Total
(ii) Investments (during the reporting period)
Security Transactio Buy / Quantity Gross Net Rate* Net
Name n Date Sell Rate Transaction
Value
 Report to clarify calculation of Net Rate
(iii)Holding Report as of end of quarter
Security Name Quantity Average Market Total Market % to
Cost Rate Cost Value Portfolio
Equity
Page 144 of 175
Security Name Quantity Average Market Total Market % to
Cost Rate Cost Value Portfolio
A:
B:
Debt
A:
B:
Mutual Funds
A:
B:
Commodities
A:
B:
Other Assets
Cash & Cash
Equivalent
Total
Note:
(i) Portfolio Managers offering Co-investment services, may provide details as
applicable, for assets permitted to be managed by them
E. Other Important Information
1. With regard to client portfolio, deviations from investment approach, if any
2. With regard to debt securities, details of any delay in coupon payments, if any
3. With regard to debt securities, details of default, if any
4. With regard to portfolio allocation in equity and commodity derivatives, details
of funds and securities held as collateral, if any.
5. Details of Other assets outstanding to be received in Clients account for more
than 3 months from the due date
Page 145 of 175
Nature of Asset Outstanding
amount (In Rs.)
a. Coupon Payments
b. Dividends
c. Others
Total
6. Investments in the securities of associates/related parties of Portfolio Manager:
a. Transaction wise
Sr. Issuer Type of ISIN Transaction wise Details
No. name security Transaction Buy/sell Quantity Gross Net
date transaction transaction
value (INR in value (INR in
crores) crores)
b. Security wise
Sr. Issuer Type of ISIN Security wise Details
No. name security Investment Value of percentage percentage
amount (cost investments as of client’s of PM’s
of investment) on last day of AUM as on AUM as on
as on last day the previous last day of last day of
of the quarter (INR in the the previous
previous crores) previous quarter (INR
quarter (INR in quarter in crores)
crores) (INR in
crores)
c. Details regarding passive breach of investment limits:
Page 146 of 175
Details of steps taken, if
Sr. Details of Date of passive any, to rectify the passive Date of Whether rectified
No. passive breach breach breach of limits rectification within 90 days
d. Details of credit ratings of investments in debt and hybrid securities.
7. Any other important information.
8. Portfolio Managers offering Co-investment services, may provide investment
data, wherever applicable on cost basis or as may be specified by SEBI
Page 147 of 175
Annexure 7A: Format of Complaint data to be displayed by the Portfolio
Managers
Format for investor complaints data to be disclosed by Portfolio Managers on their
website on monthly basis:
Data for the month ending - _______
Sr. Received Pending Received Resolved* Total Pending Average
No. from at the Pending# complaints Resolution
end of > 3 months time^ (in
last days)
month
1 Directly
from
Investors
2 SEBI
(SCORES)
3 Other
Sources (if
any)
Grand
Total
^ Average Resolution time is the sum total of time taken to resolve each complaint
in days, in the current month divided by total number of complaints resolved in the
current month.
Trend of monthly disposal of complaints
Sr. Month Carried forward from Received Resolved* Pending#
No. previous month
1 April, YYYY
2 May, YYYY
3 June, YYYY
4 …………
5 March, YYYY
Grand Total
*Inclusive of complaints of previous months resolved in the current month.
#Inclusive of complaints pending as on the last day of the month
Trend of annual disposal of complaints
SN Year Carried forward from Received Resolved** Pending##
previous year
Page 148 of 175
1 2018-19
2 2019-20
3 2020-21
Grand Total
** Inclusive of complaints of previous years resolved in the current year.
## Inclusive of complaints pending as on the last day of the year.
Page 149 of 175
APPENDIX: LIST OF CIRCULARS RESCINDED
Sr. No. Date of Subject Circular Ref. No.
Circular
1. October Format of Half Yearly RPM circular No.1(93-94)
20, 1993 Report and Guidelines for
advertisement
2. September Clarification for definition RPM CIRCULAR NO.1 (2002-
17, 2002 of associates 2003)
3. January Application procedure for SEBI/RPM CIRCULAR NO.2
14, 2003 registration/renewal as (2002-2003)
Portfolio Manager
4. February Clarification for SEBI/RPM CIRCULAR NO.3
05, 2003 amendment to (2002-2003)
Reg.16(1)(b) & Reg.
16(3)
5. November Improvement in corporate IMD/PMS/CIR/1/21727/03
18, 2003 governance
6. June 28, Clause in disclosure SEBI/IMD/CIR No.1/ 70353 /2006
2006 document/ agreement/
power of attorney
7. May 11, Renewal of certificate of SEBI/IMD/DOF-I/SRP/Cir No.
2007 registration 1/93251 /2007
8. February Extension in time for IMD/CIR No.1/155740/2009
27, 2009 compliance with
Regulation 16(8) of SEBI
Portfolio Managers
Regulations
9. May 11, Compliance with IMD/PMS/2/2009/11/05
2009 Regulation 16(8) of SEBI
(Portfolio Managers)
Regulations, 1993
10. June 11, Submission of Monthly SEBI/IMD/PMS/CIR-3/2009
2009 Report
Page 150 of 175
11. June 23, Maintenance of Clients’ IMD/DOF I/PMS/Cir- 4/2009
2009 Funds in a separate Bank
Account by Portfolio
Managers
12. July 31, Amendment to Additional IMD/DOF I/PMS/Cir- 5/2009
2009 Information for
registration / renewal
applications
13. September Compliance with IMD/DOF-1/PMS/CIR-6/2009
10, 2009 Regulation 16(8) of SEBI
(Portfolio Managers)
Regulations, 1993
14. March 15, Half Yearly Reporting by IMD/DOF-1/PMS/Cir-1/2010
2010 Portfolio Managers
15. September Online processing of N.A.
21, 2010 Portfolio Manager
Applications
16. October Portfolio Managers - Cir. /IMD/DF/13/2010
05, 2010 Regulation of fees and
charges
17. October Portfolio Managers - Cir. /IMD/DF/14/2010
08, 2010 Monthly Report
18. November Portfolio Managers – Cir. /IMD/DF/16/2010
02, 2010 clarification on minimum
investment amount by
clients, performance of
portfolio and schemes
19. July 16, Deployment of client Cir. /IMD/DF-1/16/2012
2012 funds in liquid mutual
fund
20. May 22, Participation of Portfolio SEBI/HO/IMD/DF1/CIR/P/2019/066
2019 Managers in Commodity
Derivatives Market in
India
Page 151 of 175
21. February Guidelines for Portfolio SEBI/HO/IMD/DF1/CIR/P/2020/26
13, 2020 Managers
22. March 30, Relaxation in compliance SEBI/HO/IMD/DF1/CIR/P/2020/57
2020 with requirements
pertaining to Portfolio
Managers
23. September Operating Guidelines for SEBI/HO/IMD/DF1/CIR/P/2020/169
09, 2020 Portfolio Managers in
International Financial
Services Centre
24. January Monthly Reporting of SEBI/HO/IMD/DF1/CIR/P/2021/02
08, 2021 Portfolio Managers
25. May 12, Procedure for seeking SEBI/HO/IMD/IMD-
2021 prior approval for change I/DOF1/P/CIR/2021/564
in control of SEBI
registered Portfolio
Managers
26. December Transaction in Corporate SEBI/HO/IMD/IMD-
09, 2021 Bonds through Request I/DOF1/P/CIR/2021/678
for Quote platform by
Portfolio Management
Services (PMS)
27. December Publishing of Investor SEBI/HO/IMD/IMD-
10, 2021 Charter and disclosure of II_DOF7/P/CIR/2021/681
Investor Complaints by
Portfolio Managers on
their websites
28. December Clarification regarding SEBI/HO/IMD/IMD-
10, 2021 amendment to SEBI I/DOF1/P/CIR/2021/0000000679
(Portfolio Managers)
Regulations, 2020
Page 152 of 175
29. December Portfolio Management SEBI/HO/IMD/IMD-
21, 2021 Services for Accredited I/DOF1/P/CIR/2021/693
Investors
30. June 02, Procedure for seeking SEBI/HO/IMD-1/
2022 prior approval for change DOF1/P/CIR/2022/77
in control of Portfolio
Managers (NCLT)
31. August Circular for Portfolio SEBI/HO/IMD/IMD-
26, 2022 Managers I/DOF1/P/CIR/2022/112
32. September Circular for Portfolio SEBI/HO/IMD/IMD-I
30, 2022 Managers DOF1/P/CIR/2022/133
33. December Performance SEBI/HO/IMD/IMD-PoD-
16, 2022 Benchmarking and 2/P/CIR/2022/172
Reporting of Performance
by Portfolio Managers
34. January Change in control of SEBI/HO/IMD/IMD-PoD-
10, 2023 Portfolio Managers 1/P/CIR/2023/8
providing Co-investment
services
35. March 29, Cyber Security and Cyber SEBI/HO/IMD/IMD-PoD-
2023 Resilience framework for 1/P/CIR/2023/046
Portfolio Managers
36. August Audit of firm-level SEBI/HO/IMD/IMD-PoD-
02, 2023 performance data of 1/P/CIR/2023/133
Portfolio Managers
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POLICY RELATED LETTERS/EMAILS ISSUED BY SEBI
1. Performance benchmarking of Portfolio Managers
Reference: SEBI Letter No. SEBI/HO/IMD/IMD-PoD-2/P/OW/2022/62571/1
dated December 16, 2022
Addressed to: APMI
1.1. SEBI had constituted a working group for Performance Benchmarking of
Portfolio Managers to streamline and standardize the benchmarking by the
Portfolio Managers. Based on the recommendations of the said working
group and internal deliberations, SEBI had issued circular no.
SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022
(‘Circular’) specifying various measures on performance benchmarking by
portfolio managers, asset valuation and performance reporting practices.
1.2. In order to operationalize various measures specified in the aforesaid
Circular, APMI is advised to:
1.2.1. Prescribe a maximum of three benchmarks for each Strategy as
prescribed in Para 2.3 of the Circular (reference: para 4.6A.3 of this
Master Circular). An indicative list of Benchmarks is enclosed as
Annexure-A for your perusal.
1.2.2. Coordinate on an ongoing basis (once every quarter at minimum) with
AMFI and prescribe standardized valuation norms got debt and money
market securities which shall be same as the corresponding norms
applicable to mutual funds as required in Para 2.7 of the Circular
(reference: para 2.9.1 of this Master Circular). These valuation norms
shall be followed by all the portfolio managers.
1.2.3. Empanel valuation agencies for the purpose of providing security level
prices to Portfolio Managers as required in Para 2.8 of the Circular
(reference: para 2.9.2 of this Master Circular). Portfolio Managers shall
mandatorily use valuation services obtained only from one or more of
such empaneled valuation agencies for the purpose of valuation of
securities in portfolios managed by them.
1.2.4. Put in place necessary systems and resources to enable submission of
monthly reporting by the Portfolio Managers as required in Para 2.15 of
the Circular (reference: para 5.6.6 of this Master Circular). The templates
of performance reporting have been provided in SEBI Circular nos.
SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020,
SEBI/HO/IMD/DF1/CIR/P/2021/02 dated January 8, 2021 and
SEBI/HO/IMD/IMD-PoD-2/P/CIR/2022/172 dated December 16, 2022.
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1.2.5. Make available the monthly reports of the Portfolio Managers on APMI
website in an intuitive and user-friendly manner facilitating ease of
comparison so as to provide access to portfolio level, investment
approach level, portfolio manager level and industry level information to
all the stakeholders. APMI shall also make available relative performance
of each investment approach within the strategy to concerned portfolio
manager and also disclose the same on its website.
1.2.6. Submit monthly reports to SEBI in the format specified at Annexure-B
within 7 days from the end of the month starting from the reporting period
April 2023 onwards. The said report shall also be made available on APMI
website for information to all the stakeholders.
The above activities shall be completed by January 31, 2023.
1.3. APMI may, in consultation with SEBI, modify the benchmarks prescribed for
a strategy based on the feedback received from the stakeholders and needs
arising from the evolution of the industry.
1.4. In addition to the above, the working group has made certain other
suggestions which are listed below for your consideration:
1.4.1. APMI may work with the index providers to try and ensure up to three
indices for each Strategy to provide a choice to PMs.
1.4.2. APMI may negotiate the cost of using these benchmarks with these
providers on behalf of the industry.
1.4.3. APMI will negotiate prices that are conducive to the adoption of
standardized valuation norms as part of the empanelment process.
APMI may take a suitable view on the above recommendations of the Working
Group.
Annexure - A: Indicative list of Benchmarks for each prescribed Strategy
Sl. Strategy Benchmark 1 Benchmark 2 Benchmark 3
1 Equity NIFTY 500 Index S&P BSE 500 Index MSEI SX40 Index
2 Debt NIFTY Medium to Long AA+/AA 33%, AA- 17%, CRISIL Composite
Duration Debt Index A+/A/A- - 50% - 2 - 2.5 Bond Fund Index
duration
3 Hybrid NIFTY 50 Hybrid 50% BSE 500 Index and CRISIL Hybrid 50+50
Composite debt 50:50 50% S&P BSE Arbitrage Moderate Index
Index Rate Index
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4 Multi Asset 50% Nifty 500 Index, 50% BSE 500 Index, 20%
20% NIFTY 50 Arbitrage S&P BSE Arbitrage Rate
Index, 10% Gold, 10% Index, 10% Gold, 10%
Annexure - B: Format for Performance Report Card
Quartile Analysis of {Name of IA} within {Name of Strategy} Strategy
TWRR (%)*
Benchmark/
No. of IA TWRR Index 1st 2nd 3rd
Period IAs (%) Return (%) IA Quartile Quartile Quartile Quartile
1 year 50 20.38 48.15 Bottom quartile 70.40 55.88 37.10
2 years 45 9.34 26.58 Bottom Quartile 35.78 27.13 17.81
3 years 40 12.14 19.49 Third Quartile 23.43 18.54 12.13
5 years 35 10.94 10.45 Second Quartile 14.95 8.30 -0.10
7 years 25 11.21 12.18 Second Quartile 13.48 9.36 5.43
10 years 15 13.16 11.83 Top Quartile 13.11 8.87 6.42
* Time weighted rate of returns mentioned in these columns represent the minimum return
for each quartile
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2. Reply to your queries raised for the matter pertaining to Performance
Benchmarking of Portfolio Managers
Reference: SEBI Letter No. SEBI/HO/IMD/POD-II/P/OW/2023/12814/1 dated
March 29, 2023
Addressed to: APMI
This is in respect of your letter dated January 19, 2023 and subsequent meeting
with APMI members seeking clarification on some of the clauses of SEBI Circular
dated December 16, 2022. SEBI’s response in this regard is as under:
A. Benchmarking
APMI’s Query SEBI’s response
1. Old performance of the strategy As per the Circular dated December 16,
should not be lost and the 2022, Once an IA is tagged to a Strategy
requirement of offering exit to and/or to a benchmark, the tagging shall be
investors should not apply. changed only after offering an option to
subscribers to the IA to exit without any
exit load.
But before the implementation of the
circular, if there is any old performance that
exists, the same may not be lost and
requirement of offering exit to investors in
such cases may not apply.
2. Change in benchmark should The same may not be accepted. Once an IA
not be treated as a key attribute is tagged to a Strategy and/or to a
change. benchmark, the tagging shall be changed
only after offering an option to
subscribers to the IA to exit without any
exit load.
3. Definition of Hybrid and Multi Hybrid strategy would include debt and
Asset Strategy. equity.
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Multi asset strategy shall include at least 3
asset classes.
4. The requirement of The circular is applicable to both
benchmarks to be relaxed for discretionary and Non- discretionary PMS.
NDPMS.
B. Reporting
APMI’s Query SEBI’s response
1. XIRR reporting shall trigger only You are advised to undertake back testing
for investors who have in this regard and provide Justification why
completed one full year in the investment period of 1 year (or other such
IA. time period such as 6 months or 3 months)
may be suitable for computation of
minimum, maximum and median XIRR.
2. Clarity on definition of portfolio Both represent the same.
aggregates and its difference
with TWRR.
3. Clarification needed on whether The portfolio of all clients needs to be
portfolio of the clients who put considered while reporting XIRR.
negative constraint on stocks
due to compliance stock
concentration or religious
reasons shall be considered for
XIRR reporting.
4. Whether old performance to be In this regard, you are advised to clarify how
carry forward after a change in it is proposed to represent old performance
benchmark to build credible and post transition to a new benchmark. An
verifiable performance track illustration may be provided in this regard. A
record or grandfathered. certain timeline up to which the old
performance may be represented or carried
forward may be suggested with sufficient
illustration.
5. Clarification regarding return in This is explicitly covered in the circular and
Table 1 of the Annexure 1 the annexure to the same. SEBI has no
mentioned in the circular shall further comment to offer.
be different for different IAs of
the portfolio manager.
C. Others
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1. Whether a link can be provided We are in agreement with the proposal.
w.r.t peer performance which is
to be made in every marketing
material.
2. Changed format for quarterly In SEBI circular dated December 16, 2022,
report is to be provided. it is mentioned that only Section E
pertaining to “Performance Data” will be
replaced in Annexure-1 at SEBI Circular
dated January 08, 2021, other things shall
remain the same.
3. Can timelines be relaxed for You are advised to provide a suitable
APMI’s peer comparison data in timeline by when the said information may
investor reporting and be reported and the steps involved in the
marketing materials? process along with the time required for
each step.
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3. Formats for annual submissions by Portfolio Managers- Proposal on the
Formats
Reference: SEBI Email dated October 11, 2023
Addressed to: APMI
3.1. Kindly find below formats of following Annual Compliance Reports to be
submitted by Portfolio Managers:
3.1.1. Corporate Governance Report.
3.1.2. Certificate of compliance with PMS Regulations and circulars issued
thereunder.
3.1.3. Certificate of Compliance with Performance Reporting Guidelines.
3.1.4. Certificate of compliance with Net worth requirements.
3.2. APMI is advised to issue the aforementioned formats to all Portfolio
Managers for necessary compliance.
3.3. Further, any suggestion with respect to changes in regulation or circulars
issued thereunder may be taken up with IMD-POD.
Formats
1.1.1. Corporate Governance Report
(To be submitted within 30 days of end of Financial Year)
Corporate Governance Report of for FY 20XX-XX
The Corporate Governance Report of the PMS bearing SEBI Registration No
for the FY 20XX-XX is given below:
Remarks (Indicate ‘Yes’ if
complied with and ‘No’ for
non- compliance along with
S. corrective actions taken, if
Particulars
No. any)
1. Whether the Portfolio Manager has disclosed the
performance of benchmark indices in the
periodical reports to be furnished to the client
in terms of the PM Regulations and Circulars
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issued thereunder?
2. Whether Board of the Portfolio Manager has
reviewed the compliance of regulations in their
periodical meetings?
3. Whether there is a system of getting quarterly
reports by compliance officer regarding
compliance of SEBI Regulations and Guidelines
and also that due diligence has been exercised by
their officials in their operations and that the
interests of investors are protected?
4. Whether Board of the Portfolio Manager has
reviewed redressal of investors’ grievances?
5. Whether advisory/ caution/ deficiency/ warning
letters issued to the Portfolio Managers by SEBI
have been placed before the Board of the
Portfolio Manager?
6. Whether internal audit of Portfolio Manager has
been conducted by a practicing Chartered
Accountant (“CA”) or Company Secretary (“CS”)
so as to judge the quality of internal procedures
being followed by the Portfolio Manager and
report of the same has been submitted to the
Board of the Portfolio Manager?
7. Whether Portfolio Manager has exercised due
diligence in all its operational activities
This certificate is issued in accordance with requirement of Para 5.2.2 of the SEBI Master
Circular for Portfolio Managers dated March 20, 2023.
For PMS
( )
Name of the Principal Officer
Date:
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1.1.2. Certificate of compliance with PMS Regulations and Circulars
( To be submitted within 60 days of end of Financial Year)
Certificate of compliance
with PMS regulations and circulars issued thereunder
This is to certify that the Portfolio Manager bearing SEBI Registration
number ................ has complied with Portfolio Manager Regulations and Circulars issued
thereunder during the FY 20XX-XX except in following instances of non-compliance, if any:
Sl No Details of Non-Compliance Corrective Actions taken
1.
2.
3.
The corrective actions for aforementioned non-compliances are duly approved by Board
of the Portfolio Manager.
This certificate is issued in accordance with requirement of Para 5.2.1.2 of the Master
Circular for Portfolio Managers dated March 20, 2023.
For PMS
( )
Name of the Principal Officer
Date:
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1.1.3. Certificate of compliance with Performance Reporting Guidelines
(To be submitted within 60 days of end of Financial Year)
Certificate of Compliance with Performance Reporting Guidelines
The Certificate of Compliance with Performance Reporting Guidelines by the Firm for the PMS
bearing SEBI Registration No for the FY 20XX-
XX is given below:
S. Particulars Remarks
No. (Indicate ‘Yes’ if
complied with and ‘No’ for non-
compliance along with corrective
actions taken, if any)
Whether during the year, Portfolio Manager has
1. Considered all cash holdings and investments in
liquid funds, for calculation of performance.
2. Reported performance data net of all fees and
all expenses (including taxes).
3. Clearly disclosed any change in investment
approach that may impact the performance of
client portfolio, in the marketing material.
4. Ensured that performance reported in all
marketing material and website of the Portfolio
Manager is the same as that reported to SEBI.
5. Ensured that the aggregate performance of the
Portfolio Manager (firm-level performance)
reported in any document shall be same as the
combined performance of all the portfolios
managed by the Portfolio Manager
6. Provided a disclaimer in all marketing material
that the performance related information
provided therein is not verified by SEBI.
7. Carried out the audit of firm- level performance
data in line with standard terms of reference
specified by APMI.
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8. Attached/submitted the audit report on firm-level
performance data to SEBI.
This certificate is issued in accordance with requirement of Para 5.3.1 of the Master Circular
for Portfolio Managers dated March 20, 2023 read with Clause 4 of Circular
SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/133 dated August 02, 2023.
For PMS
( )
Director/ Partner of PMS
Date:
1.1.4. Certificate of compliance with Net worth requirements
(To be submitted within 6 months of end of Financial Year)
Certificate of compliance with Net worth requirements under the SEBI
(Portfolio Managers) Regulations, 2020
This is to certify that the Portfolio Manager bearing SEBI
Registration number .................... has fulfilled the Net worth requirements as stipulated under
the SEBI (Portfolio Managers) Regulations, 2020 as on March 31, 20XX.
Amount in INR
Paid up equity capital
Add: Free Reserves (excluding reserves created out of
revaluation)
Less: Aggregate value of accumulated losses
Less: Deferred expenditure not written off (including
miscellaneous expenses not written off)
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Less: Minimum Capital Adequacy/ Net worth requirements
(separately and independently) for any other activity
undertaken under respective SEBI Regulations.
Networth
This certificate is issued in accordance with requirement of Para 5.2.1.1 of the Master Circular
for Portfolio Managers issued on March 20, 2023.
Name of the auditor:
Registration/Membership no.:
Unique Document Identification Number:
Date:
(The certificate has to be issued by a qualified Chartered Accountant based on audited account
within 6 months from the end of Financial Year. PMS to ensure submission to SEBI with proper
forwarding by principal officer.)
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4. Clarification regarding Clause 2.6 and 2.7 of SEBI Master Circular for
Portfolio Managers
Reference: SEBI Letter No. SEBI/HO/IMD-POD-1/P/OW/2023/50456/1 dated
December 27, 2023
Addressed to: APMI
4.1. This has reference to the Clauses 2.6 and 2.7 of the SEBI Master Circular for
Portfolio Managers dated March 20, 2023 (hereinafter referred to as ‘Master
Circular’). Pursuant to feedback received from APMI, the matter was
examined and following is clarified:
4.1.1. Clauses 2.6 and 2.7 of the Master Circular shall be applicable for
discretionary and non-discretionary services provided by the Portfolio
Manager.
4.1.2. Clause 2.6 of the Master Circular shall be applicable for co-investment
portfolio management service provided by Portfolio Manager. Clause 2.7
of the Master Circular shall not be applicable for co-investment portfolio
management service provided by Portfolio Manager.
4.1.3. Clauses 2.6 and 2.7 of the Master Circular shall not be applicable for
advisory services provided by the Portfolio Manager.
4.1.4. Clause 2.7.3 of the Master Circular inter alia mandated Portfolio
Managers with assets under management of INR 1000 crores or more
under discretionary and non-discretionary services, to have in place an
automated system with minimal manual intervention for ensuring
effective funds and securities management. In order to ensure
compliance with the said Clause, the following may be specified by APMI:
4.1.4.1. Portfolio Managers, who have crossed the threshold of INR 1000
crores of AUM after April 01, 2023 but before the date of this letter,
shall ensure compliance with the Clause 2.7.3 of the Master Circular
by June 30, 2024.
4.1.4.2. Portfolio Managers, who would cross the threshold of INR 1000 crores
of AUM after the date of this letter, shall ensure compliance with the
Clause 2.7.3 of the Master Circular within 6 months from the end of
the month in which the AUM crosses the threshold of INR 1000 crores.
4.1.4.3. The AUM for this purpose shall be the total AUM for discretionary and
non-discretionary services reported at the end of the month on
SEBI/APMI Portal.
4.1.4.4. Once the compliance requirement becomes applicable, the same shall
continue to remain applicable.
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4.2. APMI is advised to issue appropriate communication to all Portfolio Managers
to this effect.
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5. Provision for Submission of Compliance Reports of PMS through the SEBI
Intermediary Portal
Reference: SEBI Email dated April 29, 2024
Addressed to: APMI
5.1. Portfolio Managers to submit the reports as mentioned in the trail email,
online through the SEBI Intermediary Portal (SI Portal) at
https://siportal.sebi.gov.in/intermediary only. Physical copies of the reports
are required to be retained by the PMSs as part of record keeping in terms
of SEBI (Portfolio Managers) Regulations, 2020 or as informed by SEBI
from time to time.
5.2. Also kindly find below the upload manual for easy reference while
submitting reports.
5.3. All PMSs may be advised to adhere to the timelines with regards to the
submission.
5.4. In case of any technical issues faced while uploading reports, the same
may be flagged with screenshot of the issue to our ITD Team at
portalhelp@sebi.gov.in.
5.5. APMI is advised to issue clarification/ notification to all Portfolio Managers
in this regards.
Upload Manual
Facility to upload periodic regulatory reports/certificates submitted by Portfolio
Managers (PMS)
1. Facility for uploading of following 4 reports/certificates were enabled in the SI Portal viz.
1.1. PMS Improvement in Corporate Governance Report,
1.2. PMS Certificate of Net Worth,
1.3. PMS Certificate of compliance with Regulations,
1.4. PMS Certificate of Compliance with Performance Reporting Guidelines
2. Brief description of the Reports/ Certificates is as follows:
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Sr. Reports/Certificates Description (Regulatory requirements to be verified
No. with latest relevant SEBI Regulations, Circulars, etc.)
2.1 Improvement in 2.1.1. In terms of clause 5.2.2. of the Master Circular
Corporate Governance for Portfolio Managers issued on March 20, 2023,
Report Portfolio Managers shall report to SEBI on
compliance with the provisions of the above
guidelines while submitting the annual reports.
2.1.2. The report should reach SEBI within thirty days
from the end of the financial year.
2.2 Certificate of Net Worth 2.2.1. In terms of Regulation 9 of the SEBI (Portfolio
Managers) Regulations, 2020 (“PMS Regulations”),
all Portfolio Managers are required to maintain a net
worth of not less than five crore rupees, provided that
a Portfolio Manager who was granted certificate of
registration prior to the commencement of the PMS
Regulations (notified on January 16, 2020), shall raise
its net worth to not less than five crore rupees within
thirty-six months from such commencement.
2.2.2. The Portfolio Manager is required to fulfil the
net worth requirements under the PMS Regulations,
separately and independently, of the capital
adequacy requirements, if any, for each activity
undertaken by it under the relevant Regulations.
2.2.3. "Net worth" means the aggregate value of paid
up equity capital plus free reserves (excluding
reserves created out of revaluation) reduced by the
aggregate value of accumulated losses and deferred
expenditure not written off, including miscellaneous
expenses not written off.
2.2.4. In terms of clause 5.2.1.1 of the Master Circular
for Portfolio Managers issued on March 20, 2023,
Portfolio Managers are required to submit to SEBI, a
certificate from the qualified Chartered Accountant
certifying the net-worth as on March 31, every year
based on audited account within 6 months from the
end of Financial Year.
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2.3 Certificate of compliance 2.3.1. In terms of clause 5.2.1.2 of the Master Circular
with Regulations for Portfolio Managers issued on March 20, 2023,
Portfolio Managers are required to submit to SEBI, a
certificate of compliance with PM Regulations and
circulars issued thereunder, duly signed by the
Principal Officer, within 60 days of end of each
financial year.
2.3.2. Further, details of non-compliance along with
the corrective actions, if any, duly approved by Board
of the Portfolio Manager, shall also be provided.
2.4 Certificate of Compliance 2.4.1. Clause 4.5.3. of the Master Circular for Portfolio
with Performance Managers issued on March 20, 2023 may be referred
Reporting Guidelines which specifies the manner in which performance
benchmark reporting to clients is required to be done.
2.4.2. The firm-level performance data of Portfolio
Managers shall be audited annually. Confirmation
with compliance with paragraph 4.5.3. of the Master
Circular for Portfolio Managers issued on March 20,
2023, shall be reported to SEBI within sixty days of
end of each financial year.
2.4.3. The said report to SEBI shall be certified by the
Directors/Partners of the Portfolio Manager or by
person(s) authorized by the Board of
Directors/Partners of the Portfolio Manager.
3. PMS can upload the aforementioned reports @ the following path:
Portfolio Managers → Other Reports → Report Module → Proceed to Upload → Select
Report Type → Proceed
4. Details steps to upload the reports are mentioned hereunder:
4.1. Click on Portfolio Managers → Other Reports → Report Module
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4.2. Click on Proceed to Upload
4.3. The reports will appear as under.
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4.4. Say, Report – PMS Certificate of Net Worth is to be uploaded. Select the report and
click on Proceed:
4.5. Click on Browse file to select the relevant file and then click on Upload
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5. Status of the uploaded reports can be viewed at the following path:- Portfolio Managers →
Other Reports → Report Module → Proceed to Upload
5.1. Click on View Uploads button
5.2. Select the Report Type, and enter 'Submit Date' Range and click on Search.
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5.3. Status of the uploaded file may be viewed under Search Results. In case file has been
processed as Error, click on the View Error button.
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