Sebi introduces process for transferring PMS biz from one portfolio manager
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Markets regulator Sebi on Friday introduced a streamlined process for transferring Portfolio Management Services (PMS) business from one portfolio manager to another, aimed at enhancing ease of doing business.
Markets regulator Sebi on Friday introduced a streamlined process for transferring Portfolio Management Services (PMS) business from one portfolio manager to another, aimed at enhancing ease of doing business.Under the new framework, a portfolio manager can transfer its PMS business only after obtaining prior approval from the Securities and Exchange Board of India (Sebi).
In cases where the transfer takes place between two portfolio managers belonging to the same group, both holding valid PMS registrations, Sebi has allowed either the transfer of select Investment Approach(es) or the entire PMS business, subject to certain conditions.
If the entire PMS business is transferred, the transferor must surrender its PMS registration certificate within 45 working days of the completion of the transfer.
However, if only selected Investment Approach(es) are transferred, the transferor may continue to hold its PMS registration, Sebi said in its circular.
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For transfers between portfolio managers who do not belong to the same group, a joint application must be submitted by both the transferor and the transferee to Sebi for approval. In such cases, the entire PMS business must be transferred, as partial transfers of select Investment Approach(es) are not permitted.
Further, the transferee must meet all regulatory requirements and will assume responsibility for all pending actions, litigations, and obligations of the transferor once the transfer is complete. An undertaking to this effect must accompany the joint application.
The transfer process must be completed as expeditiously as possible and not later than two months from the date of Sebi's approval. Until the process is completed, the transferor will continue to act as a portfolio manager but will not be allowed to onboard new clients.
Following completion of all formalities or at the end of two months, whichever is earlier, the transferor must surrender its PMS registration certificate.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
