Portfolio managers: Sebi extends timeline for implementation of norms

By: |
June 30, 2020 12:01 AM

In February, the markets regulator had mandated that no upfront fees should be charged by portfolio managers to clients, either directly or indirectly.

At the same time, Sebi had also put a cap on the exit load charged.At the same time, Sebi had also put a cap on the exit load charged.

The Securities and Exchange Board of India (Sebi) on Monday extended the timeline for the implementation of the guidelines for portfolio managers by three months to October 1 in the wake of the Covid-19 crisis.

In February, the markets regulator had mandated that no upfront fees should be charged by portfolio managers to clients, either directly or indirectly.

“Brokerage at actuals shall be charged to clients as expense. 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 Assets under Management (AUM),” Sebi had stated. At the same time, Sebi had also put a cap on the exit load charged.

The regulator had also mandated portfolio managers to provide an option to clients to be on-boarded directly, without any intermediation of persons engaged in distribution services.

“Portfolio managers shall prominently disclose in its disclosure documents, marketing material and on its website, about the option for direct on-boarding. At the time of on-boarding of clients directly, no charges except statutory charges shall be levied,” Sebi had stated.

Sebi had also said information about investment approaches offered by portfolio managers should be uniform across all types of regulatory reporting, client reporting, disclosure document, marketing materials and any document which refer to services offered by portfolio managers.

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