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Most of the people in India know about investing in securities market directly or through Mutual Funds. Here is a brief about how one can invest in securities market through PMS.

1. A portfolio manager is a body corporate who, pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client, the management of a portfolio of securities or the funds of the client.

2. PMS provides freedom of personal choice for investment in particular securities/sectors but in mutual fund once choice is made for a particular fund, investor cannot instruct mutual fund house manager to invest money in specific securities/sectors.

3. For registration as a portfolio manager, an applicant is required to pay a non-refundable application fee of Rs.1 lakh, have a minimum networth of Rs. 2 crores, pay Rs. 10 lakhs as registration fees at the time of grant of certificate of registration by SEBI and pay Rs. 5 lakhs to SEBI after every three years as renewal fees.

4. SEBI (Portfolio Managers) Regulations, 1993 provides for the regulation of PMS in India. The services of a Portfolio Manager are governed by the agreement between the portfolio manager and the investor. The agreement should cover the minimum details as specified in the SEBI Portfolio Manager Regulations. However, additional requirements can be specified by the Portfolio Manager in the agreement with the client. Hence, an investor is advised to read the agreement carefully before signing it.

5. The regulations provide that the portfolio manager shall charge a fee as per the agreement with the client for rendering portfolio management services. The fee so charged may be a fixed amount or a return based fee or a combination of both. The portfolio manager shall take specific prior permission from the client for charging such fees for each activity for which service is rendered by the portfolio manager directly or indirectly (where such service is outsourced).

6. The portfolio manager is required to accept minimum Rs. 5 lakhs or securities having a minimum worth of Rs. 5 lakhs from the client while opening the account for the purpose of rendering portfolio management service to the client.

7. Portfolio manager can only invest and not borrow on behalf of his clients.

8. Investors can log on to the website of SEBI for information on SEBI regulations and circulars pertaining to portfolio managers. Addresses of the registered portfolio managers are also available on the website.

9. Investors would find in the Disclosure Document the name, address and telephone number of the investor relation officer of the portfolio manager who attends to the investor queries and complaints. The grievance redressal and dispute mechanism is also mentioned in the Disclosure Document. Investors can approach SEBI for redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned portfolio manager and follows up with them.

10. 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.


1. The above write up is only for awareness purpose and should not be considered as expert opinion.

2. Please feel free to share with your friends and everyone without any copy right issues.

CA. Brijesh Baranwal

Practicing Chartered Accountant

Published by

CA. Brijesh Baranwal
(CA Practice)
Category Shares & Stock   Report

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