PMS investor? Your minimum investment limit has been hiked by SEBI; key highlights from board meet

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Updated: November 20, 2019 5:20:16 PM

According to Sebi, the circular pertains to VaR, ELM, MTM, delivery, special/ additional or any other margin that has to be collected from the clients.

The capital market regulator SEBI on Wednesday said that the minimum investment limit has been increased to Rs  Rs 50 lakh in case of a PMS fund, from Rs 25 lakh earlier. Notably, SEBI has also hiked that the minimum net worth requirement from Rs 2 crore to Rs 5 crore for a company to run a PMS fund. The existing portfolio managers will have to meet this requirement in the next 36 months, SEBI Chairman Ajay Tyagi said in a press conference. The regulator said that discretionary portfolio managers must invest only in listed securities, money market instruments and mutual funds and other such securities specified by SEBI. Non-discretionary advisory portfolio managers cannot invest not more than 25 percent of the asset under management in unlisted securities.

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Apart from the above change in regulations, SEBI also cut the timeline to complete rights issue from current T+55 days earlier to T+31 days. Currently, a rights issue process, through the fast track route, typically takes 55-58 days and excludes the period taken for completing the letter of offer and any statutory and regulatory approvals.  In a bid to boost efficiency, SEBI has announced the introduction of dematerialised Rights Entitlements and trading of these on stock exchanges.

The watchdog said that shareholders holding shares in physical form will be required to provide details of demat account for credit of Rights Entitlements. Further, ASBA facility has been made mandatory for all investors applying to rights issues. With the intention to increase transparency, SEBI has extended the Business Responsibilty Reporting to 1,000 listed firms. The top 1,000 listed companies by market capitalisation will be required to include business responsibility reporting as part of their annual reports. Earlier, this was only applicable to the first 500 listed firms.

SEBI Chairman Ajay Tyagi called for better disclosures and transparency by listed entities. “The philosophy is that more information is in the public domain which can then guide investors as to what is happening,” SEBI chairman Ajay Tyagi said in the press conference. Default in bank loan principal of interest for 30 days must be disclosed to exchanges. Listed firms will have to make this disclosure within 24 hours after the 30th day of default. The new norms will be applicable from Jan 1, 2020.

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