Unlike the former PMS regulations, a performance report to the clients is required to be submitted every three months, along with a disclosure of default in payment of coupons, or debt security, or downgrading of ratings by the credit rating agency. The Report largely focuses on registrants directly regulated by the OSC: exempt market dealers, portfolio managers (“PMs”) and investment fund managers. 2. Registration of Portfolio Managers a. With regard to performance reporting, the Guidelines mandate that cash holdings and investments in liquid funds shall also be included for calculation, and performance data is to be calculated net of fees and expenses. While the Guidelines specify that the brokerage paid by the PMs can be charged to clients as expense, the total operating expenses, excluding the fees charged for portfolio management services and brokerage, shall be now capped at a maximum of 0.50% of the clients’ average daily assets under management. The following are certain considerations in respect of the performance report prepared by portfolio managers as specified in the 2020 PMS regulations and the circular: May disclose performance segregated on the basis of investment approach; Consider all cash holdings and investments in liquid funds for the calculation of performance; Report performance data net of all fees and expenses; Disclose any change in investment approach that may impact the performance of a client’s portfolio; Ensure that the performance reported in all marketing material and the website of the portfolio manager is the same as that reported to the SEBI; Ensure that the aggregate performance of the portfolio manager reported in any document shall be the same as the combined performance of all portfolios managed by the portfolio manager; and. To find out, India Business Law Journal sought answers from a large number of professionals, mainly experienced lawyers at Indian law firms and India-focused in-house counsel around the world. The 2020 PMS regulations state that such reporting should be made uniformly in the disclosures to the SEBI, in marketing materials, in reports shared with clients and on its website. SEBI issues Operating Guidelines for Portfolio Managers in IFSC. A uniform ‘investment approach’ shall be provided in the disclosure document, marketing materials, etc., which shall inter alia include a description of the investment objective, types of securities, portfolio allocation, benchmark, indicative tenure, risks, etc. The investors like HNIs who already have some knowledge and experience of investing in … A grace period of three years has been afforded to presently registered portfolio managers to increase their net worth. Disclosure, reporting requirements. The principal officer is required to have: (1) professional qualification in finance, law, accountancy or business management; (2) experience of at least five years in related activities in the securities market (at least two years of relevant experience is required to be in portfolio management or investment advisory services, or in areas related to fund management); and (3) a relevant NISM (National Institute of Securities Markets) certification. The disclosure document is not perused by the SEBI. 2. Enter your email address to subscribe to this blog and receive notifications of new posts by email. A portfolio manager who was granted a certificate of registration prior to the commencement of the 2020 PMS regulations is required to comply with requirements (1) and (2) above within three years. Further, in terms of Clause 3(1) of the IFSC Guidelines, SEBI can issue guidelines for any entity desirous of undertaking any other financial services relating to securities market. In addition, certain changes to the regulatory framework for portfolio managers have been mandated. Reporting requirements have also been revised and standardized. Additionally, a compliance certificate shall be furnished to SEBI within sixty days from the end of each financial year. Provide a disclaimer in all marketing material that the performance-related information provided is not verified by the SEBI. The circular states the following in this regard: Clients can be directly onboarded by portfolio managers without any intermediation by distributors. At the time of direct onboarding of clients, only statutory charges shall be levied. The IFSC Guidelines and related Circulars issued by SEBI from time to time provide for a broad framework for operation of various intermediaries (including Portfolio Managers) therein, as defined in Clause 2(1)(g) of the IFSC Guidelines. The activities of approximately 1300 registered firms and 66,000 individuals in Ontario PMS sector not. 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guidelines for portfolio managers

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