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Portfolio Manager Registration With SEBI
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Portfolio Manager Registration With SEBI

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    Who Are Portfolio Managers?

    Portfolio managers are also termed asset managers, investment councilors, or investment managers. There are various benefits associated with hiring a portfolio manager but to become one, an applicant is required to get registers with the SEBI. As per norms of SEBI, portfolio manager registration is regulated by SEBI regulations of 1993 for the same. The norms state that any person who is under the arrangement in form of a contract or advises firms or undertakes administration of funds of the clients on their behalf should register as a portfolio manager from SEBI. 

    In other words, one can be called a portfolio manager if he or she makes investment decisions or conducts related activities on behalf of an investor or a corporate client. In the following sections, we will understand the benefits of becoming a portfolio manager, its eligibility criteria for registration, and the related registration procedure. 

    Benefits of Hiring a Portfolio Manager for Companies

    Following are the benefits of hiring a portfolio manager for your business:

    Personalized management of investment portfolios

    Portfolio managers can act on behalf of the investor to conduct investment activities personally and is responsible for the management of all the assets and securities of clients. 

    Nominal Charges

    Portfolio managers usually charge a percentage of the assets they manage as their fee. The transparent fee charged by the Mangers is lower than the retail management or costs related to distribution. This makes hiring a Portfolio manager even more fruitful.

    Transfer of responsibility

    The responsibility of managing huge securities or investments could prove a lot for the investor. It takes a significant amount of time and energy. Also, portfolio managers are bound by fiduciary responsibility to act with honesty and in good faith while keeping the interests of the client in mind. The hassle-free approach and time savings available to corporate clients are quite significant compared to the fee charged by them. 

    Eligibility Criteria for Becoming a Portfolio Manager

    To apply for a Portfolio Manager license from SEBI, one needs to get themselves registered from the authority. The applicant must send an application for registration to the SEBI with the requisite documents. After this, the board scrutinizes the application on the following criteria to decide whether the applicant is eligible for registration or not.

    The applicant must be a corporate body. Any individual is prohibited from applying for the post of registration.
    The applicant must possess the infrastructure necessary to support the activities of the portfolio manager. The infrastructure includes necessary equipment, office space, and essential human resources.
    The principal officer (PO) of the applicant entity must have any of the following qualifications:
    1. Experience of a minimum of 10 years in activities related to the securities market, stockbroker, portfolio manager, or fund manager.
    2. CFA institute’s CFA charter.
    3. A professional qualification from a recognized institution or university in the field of accountancy, law, finance, and business management.
    The applicant must be fit and proper.
    The applicant’s objective should indicate his/her work to be in the general interest of the investors.
    The applicant organisation must have a minimum of 2 employees with a minimum experience of 5 years between them in activities like stockbroking and fund/investment management.
    A minimum net worth of Rs. 5 crores.
    The application will be rejected in the following scenarios:
    1. If an earlier application from the same applicant was rejected by the board.
    2. If the board has conducted any disciplinary action against any person who has a direct or indirect connection with the applicant.
    3. If the PO or any other administrative officer of the applicant organisation is involved in any litigation.
    4. Convicted or found guilty of any financial offense or anything involving moral turpitude.

    Procedure for Registration as Portfolio Manager from SEBI

    To start the process of registration, the applicant should submit an application to the board via Form A. the format for Form A is available in the SEBI regulation’s Schedule 1.
    The applicant is required to submit a non-refundable fee of Rs. 1,00,000 by directly crediting into SEBI’s bank account through online transfer or via a Demand Draft.
    After receiving the application, the board analyses the application and document as per the eligibility criteria and if satisfied with the application it will intimate the applicant.
    The online application for the Portfolio manager can be filed through the following link: https://siportal.sebi.gov.in
    Document Required

    Documents Required For Portfolio Manager Registration

    The following documents are required for Depository Participant SEBI Registration:

    Copy of documents mentioning details of the applicant.
    A copy of the company’s incorporation certificate.
    Details of the administrators’ or PO’s qualifications.
    Copies of filled application forms.
    MoA and AoA of the corporate body mentioning its objectives.
    Any other relevant documents asked for filing by the board.

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      Frequently Asked Questions on Portfolio Manager Registration With SEBI

      The applicant must be a corporate body with the administrator having relevant experience and qualifications. The applicant organisation must possess the necessary infrastructure to support the activities of the portfolio manager. The infrastructure includes necessary equipment, office space, and essential human resources.

      Portfolio managers can act on behalf of the investor to conduct investment activities personally and is responsible for the management of all the assets and securities of clients. Portfolio managers usually charge a percentage of the assets they manage as their fee. The transparent fee charged by the Mangers is lower than the retail management or costs related to distribution. This makes hiring a Portfolio manager even more fruitful. The hassle-free approach and time savings available to corporate clients are quite significant compared to the fee charged by them.

      Portfolio managers are also termed asset managers, investment councilors, or investment managers. The SEBI norms state that any person who is under the arrangement in form of a contract or advises firms or undertakes administration of funds of the clients on their behalf should register as a portfolio manager from SEBI.

       

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