Master Circular for Portfolio Managers

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....w for the time being in force. Terms not defined in this Master Circular shall have the same meaning as provided under the relevant Regulations. C. Notwithstanding such rescission, C.1. anything done or any action taken or purported to have been done or taken under the rescinded circulars, including registrations or approvals granted, fees collected, registration suspended or cancelled, any inspection or investigation or enquiry or adjudication commenced or show cause notice issued prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; C.2. any application made to SEBI under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular; C.3. the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or reme....

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....all respects, otherwise it may delay processing of the registration application. 1.1.4. Online process for Fresh Registrations and Updation of Information is given in Annexure 1A of this Master Circular³. 1.2. General Registration Guidelines 1 SEBI/RPM CIRCULAR NO.2 (2002-2003) dated January 14, 2003 2 SEBI/HO/MIRSD/MIRSD1/CIR/P/2017/38 dated May 02, 2017 3 Online Process of Portfolio Manager applications dated September 21, 2010 4 RPM circular No.1(93-94) dated October 20, 1993 Page 8 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 1.2.1. The registration granted to a portfolio manager under Chapter II of the PM Regulations is for the principal office as well as for all the branch offices of the portfolio manager in India. 1.2.2. The portfolio manager shall mention its registration number contained in the certificate of registration in all the correspondence with SEBI, other authorities, Stock Exchanges and the clients of the portfolio manager. 1.2.3. With a view to ensuring that all ....

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....s are considered to be in the same group if: 1.3.2.1. the same person, by himself or in combination with relatives, directly or indirectly exercises control over both the entities or, Page 10 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 1.3.2.2. one is an 'associate company' of another and for this purpose, ‘associate company' shall mean ‘associate company' as defined under sub-section (6) of section 2 of the Companies Act, 2013, or 1.3.2.3. where one entity directly or indirectly exercises 'control' over the other entity and for this purpose, 'control' as defined under the Regulation 2(1)(e) of the PM Regulations shall be referred. 1.4. Co-investment Portfolio Management Services 1.4.1. 6The Co-investment portfolio management services shall be provided in the following manner: 1.4.1.1. A Manager of Category I or Category II Alternative Investment Fund ("AIF") who is also a SEBI registered Portfolio Manager, and intends to act as Co-investment Portfolio Manager and offer Co....

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....1/P/CIR/2021/564 dated May 12, 2021 8 SEBI/HO/IMD-1/DOF1/P/CIR/2022/77 dated June 02, 2022 Page 12 of 100 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 1.5.1.5. In matters which involves scheme(s) of arrangement which needs sanction of the National Company Law Tribunal ("NCLT”) in terms of the provisions of the Companies Act, 2013, the Portfolio Managers shall ensure the following: 1.5.1.5.1. The application seeking approval for the proposed change in control under PM Regulations shall be filed with SEBI prior to filing the application with NCLT; 1.5.1.5.2. Upon being satisfied with compliance of the applicable regulatory requirements, in-principle approval shall be granted by SEBI; 1.5.1.5.3. The validity of such in-principle approval shall be three months from the date of such approval, within which the relevant application shall be made to NCLT; 1.5.1.5.4. Within 15 days from the date of order of NCLT, Portfolio Manager shall submit an online application in terms of paragraph 1.5.1.1 of ....

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.... dated June 15, 2021 issued by the National Institute of Securities Markets. as 1.7.1.2. The Portfolio Managers shall ensure that all such associated persons who are principal officers or employees having decision making authority related to fund management as on the date of this notification obtain the certification by passing the NISM-Series-XXI-B: Portfolio Managers Certification Examination within two years from the date 11 of the notification: Provided that a Portfolio Manager, who engages or employs any such associated person who is a principal officer or an employee having decision making authority related to fund management, after the date 12 of the Gazette Notification No. SEBI/LAD-NRO/GN/2021/49, shall ensure that such person obtains certification by passing the NISM- Series-XXI-B: Portfolio Managers Certification Examination within one year from the date of their employment. 11 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/49 dated September 7, 2021 12 SEBI Gazette No. SEBI/LAD-NRO/GN/2021/49 dated September 7, 2021 Page 15 of 100 GB भारतीय प्रतिभूति और विन....

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....ration/ certification. Page 17 of 100 B भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 2. OPERATING GUIDELINES 16 2.1. Guidelines for advertisement by Portfolio Managers¹ 2.1.1. SEBI has formulated a Code of Advertisement governing any advertisements issued by the Portfolio Managers in connection with their activities. All Portfolio Managers registered with SEBI are required to strictly observe the Code of Advertisement set out in Annexure 2A of this Master Circular. 2.2. Maintenance of Clients' Funds in a separate Bank Account by Portfolio Managers 17 2.2.1. The PM Regulations 18 states that "the portfolio manager shall segregate each client's funds and portfolio of securities and keep them separately from his own funds and securities and be responsible for safekeeping of clients' funds and securities." 2.2.2. With regard to the above, it is clarified that Portfolio Managers may keep the funds of all clients in a separate bank account maintained by the Portfolio Managers subject to the follo....

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....n or entity involved in the distribution of its services is carrying out the distribution activities in compliance with the PM Regulations and circulars issued thereunder from time to time. 2.4.1.2. Pay fees or commission to distributors only on trail-basis. Further, any fees or commission paid shall be only from the fees received by Portfolio Managers. 2.4.1.3. Ensure that prospective clients are informed about the fees or commission to be earned by the distributors for on-boarding them to specific investment approaches. 2.4.1.4. Ensure that distributors abide by the Code of Conduct as specified in Annexure 2B of this Master Circular. 2.4.1.5. Have mechanism to independently verify the compliance of its distributors with the Code of Conduct. 2.4.1.6. Ensure that, within 15 days from the end of every financial year, a self- certification is also received from distributors with regard to compliance with Code of conduct. 21 SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021 22 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 Page 20 of 100 भारतीय प्रतिभूति औà....

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....ut affecting the interest of any client. 2.6.2.4. Deviations, if any, shall be on account of exigency only and require prior written approval of the Principal Officer and Compliance officer of the Portfolio Manager with a detailed rationale for such deviation. 2.6.3. The aforesaid policies as mentioned at paragraphs 2.6.1 & 2.6.2 shall be approved by the Board / equivalent body of the Portfolio Manager. 2.7. Fair and equitable treatment of all clients 2.7.1. Portfolio Managers shall ensure that all clients are treated in a fair and equitable manner and ensure compliance with the following: 2.7.2. Requirements with respect to investments in all instruments: 26 2.7.2.1. Portfolio Managers shall constitute a dealing team (DT) which shall be responsible for order placement and execution of all orders in accordance with the aforesaid policies of the Portfolio Manager. DT 26 SEBI/HO/IMD/IMD-I DOF1/P/CIR/2022/133 dated September 30, 2022 Page 22 of 100 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India may i....

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....° विनिमय बोर्ड Securities and Exchange Board of India 3. INVESTMENTS BY PORTFOLIO MANAGERS 3.1. Transaction in Corporate Bonds through Request for Quote platform by Portfolio Management Services (PMS) 28 3.1.1. In order to enhance transparency pertaining to debt investments by Portfolio Managers in Corporate Bonds ("CBs") and to increase liquidity on exchange platform, the following shall be followed by Portfolio Managers: 3.1.1.1. On a monthly basis, Portfolio Managers shall undertake at least 10% of their total secondary market trades by value in CBs in that month by placing/seeking quotes through one-to-one (OTO) or one-to-many (OTM) mode on the Request for Quote platform of stock exchanges (RFQ). 3.1.1.2. In order to ensure compliance with the abovementioned 10 percent requirement, Portfolio Managers shall consider the trades executed by value through OTO or OTM mode of RFQ with respect to the total secondary market trades in CBs, during the current month and immediate preceding two months on a rolling basis. 3.1.1.3. All transactions in CBs wherein Portfolio Managers is on both sides of the trade sha....

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....om investors in the event of any changes in the manner or terms of usage of derivative contracts etc. 3.2.3. The total exposure of the portfolio client in derivatives should not exceed his portfolio funds placed with the Portfolio Manager and the Portfolio Manager should, in essence, invest and not borrow on behalf of his clients. 3.2.4. It may be noted that investment in derivatives shall be only on the terms mutually agreed between the Portfolio Manager and the client through the portfolio management agreement. In the event of the any violation of the terms of the agreement, the Portfolio Manager shall be responsible. 3.2.5. Portfolio Managers are required to provide necessary disclosures in Disclosure Document in terms of the PM Regulations. 3.3. Participation of Portfolio Managers in Commodity Derivatives Market in India 30 3.3.1. Portfolio Managers are permitted to participate in Exchange Traded Commodity Derivatives on behalf of their clients. 3.3.2. The participation of Portfolio Managers in the exchange traded commodity derivatives shall be subject to the following: 3.3.2.1. Portfolio Managers shall appoint SEBI registered Custodians before dealing in Exch....

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....¨à¤¿à¤®à¤¯ बोर्ड Securities and Exchange Board of India 3.3.2.7. Portfolio Managers shall also provide periodic reports to the clients as per the PM Regulations 31 regarding their exposure in Exchange Traded Commodity Derivatives. 3.3.2.8. Portfolio Managers shall report the exposure in Exchange Traded Commodity Derivatives under the heading of 'Commodity Derivatives' in the monthly reports submitted to SEBI. 3.4. Limits on investment in securities of associates/ related parties of Portfolio Managers 32 3.4.1. Regulation 24 (3A) of the PM Regulations inter-alia provides that the Portfolio Manager shall ensure compliance with the prudential limits on investment as may be specified by the Board. Accordingly, the Portfolio Managers shall ensure the following: 3.4.2. Portfolio Manager shall invest up to a maximum of 30 percent of their client's portfolio (as a percentage of the client's assets under management) in the securities of their own associates/related parties. Further, the Portfolio Manager shall ensure compliance with the following limits: Security Equity Debt and hybrid securities Equity + Debt + Hybrid securities L....

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....¤¬à¥‹à¤°à¥à¤¡ Securities and Exchange Board of India 3.5.3. The text and figures of the consent form shall be prominently highlighted and not be below size 12 font. 3.5.4. For new clients, the aforementioned consent shall be obtained at the time of entering into agreement, in terms of Regulation 22 (1) of the PM Regulations (i.e., at the time of onboarding of a new client). 3.5.5. For existing clients, the aforementioned consent shall be obtained by way of execution of a supplementary agreement with the clients. In cases where the agreements entered with existing clients contain provision for obtaining consent for investments through a specified mode, the same mode can be used for obtaining aforesaid prior consent for investments in the securities of associates/related parties of the Portfolio Manager as well. 3.5.6. Portfolio Manager shall not make any investments in the securities of associates/related parties without the prior consent of the client at the time of on boarding new clients. For existing clients, fresh investments in the securities of associates/related parties of Portfolio Managers can be made only after obtaining consent from the....

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....€à¤¯ प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 3.6.3. Portfolio Managers offering non-discretionary portfolio management services shall not make any investment in below investment grade listed securities. However, Portfolio Manager may invest up to 10% of the assets under management of such clients in unlisted unrated securities of issuers other than associates/related parties of Portfolio Manager. The said investment in unlisted unrated debt and hybrid securities shall be within the maximum specified limit of 25% for investment in unlisted securities under Regulation 24(4) of the PM Regulations. 3.7. Applicability of above provisions: 35 3.7.1. The requirements as specified at paragraphs 3.4, 3.5 & 3.6 above and in Regulations 22 (1A), 22(4) (da) & (db), 24 (3A) to 3(E) of the PM Regulations shall not be applicable for advisory portfolio management services, co-investment portfolio management services and for client categories who in turn manage funds under government mandates and/or are governed under specific Acts of State a....

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....ns, 2020 38 SEBI/IMD/CIR No.1/70353/2006 dated June 28, 2006 Page 34 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India open to review at time during the currency of the agreement or any time thereafter except on the ground of malafide, fraud, conflict of interest or gross negligence. 4.3. Disclosure of fees and charges 39 4.3.1. To ensure transparency and adequate disclosure regarding fees and charges, the client agreement shall contain a separate annexure which shall list all fees and charges payable to the portfolio manager. The said annexure shall contain details of levy of all applicable charges on a sample portfolio of Rs.50 lacs 40 over a period of one year. The fees and charges shall be shown for 3 scenarios viz. when the portfolio value increases by 20%, decreases by 20% or remains unchanged. An illustration of the same is enclosed as Annexure 4A of this Master Circular. 4.3.2. All text and figures in the annexure on fees and charges shall be at least in size 11 font. 4.3.3. New cl....

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....e) & Regulation 22(6) of SEBI (Portfolio Managers) Regulations, 2020 43 Cir./IMD/DF/16/2010 dated November 02, 2010 44 IMD/PMS/CIR/1/21727/03 dated November 18, 2003 45 Regulation 22(4)(e) of the SEBI (Portfolio Managers) Regulations, 2020 Page 36 of 100 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India of the performance of the portfolios being managed by the portfolio managers on discretionary basis in comparison with the rise or fall in the markets, portfolio managers shall disclose the performance of benchmark indices in the periodical reports to be furnished to the client in terms of the PM Regulations46. 4.5.2.2. The portfolio managers may select any of the indices available, e.g. BSE (Sensitive) index, S&P CNX Nifty, BSE 100, BSE 200 or S&P CNX 500, depending on the investment objective and portfolio of the client. These benchmark indices may be decided by the portfolio managers and any change at a later date shall be recorded and justified with specific reasons thereof. 4.5.2.3. As the purpose....

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....2020 Page 38 of 100 49 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 4.6.2.1. investment objective 4.6.2.2. description of types of securities e.g. equity or debt, listed or unlisted, convertible instruments, etc. 4.6.2.3. basis of selection of such types of securities as part of the investment approach 4.6.2.4. allocation of portfolio across types of securities 4.6.2.5. appropriate benchmark to compare performance and basis for choice of benchmark 4.6.2.6. indicative tenure or investment horizon 4.6.2.7. risks associated with the investment approach 4.6.2.8. other salient features, if any. 4.7. Disclosure of details of related party investments by Portfolio Managers 4.7.1. Regulations 22 (4) (da) & (db) of the PM Regulations provides that the Portfolio Manager shall disclose in the Disclosure Document the details of its diversification policy and the details of investment of clients' funds by the Portfolio Manager in the securities of its related parties or associates. Accordingly, the Portfol....

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....the time of Registration/ Renewal as a portfolio manager. 5.1.4.2. Select the portfolio manager tab 5.1.4.3. Select the link: PM Monthly Report 5.1.4.4. Fill the data in the format provided 5.1.4.5. Save the data and then Submit 50 SEBI/IMD/PMS/CIR-3/2009 dated June 11, 2009 51 Revised format as per SEBI circular SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/0000000679 dated December 10, 2021 to include details of Co-investment Portfolio Management services offered by Portfolio Manager 52 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 Page 41 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 5.1.5. In terms of the PM Regulations53, Compliance Officer of the portfolio managers shall also be responsible for ensuring compliance with this Master Circular. 5.2. Submission of compliance reports by Portfolio Manager54 5.2.1. With effect from Financial Year 2019-20, Portfolio Managers are required to submit the following information to SEBI:55 5.2.1.1. A certificate from the qualified Chartered Account....

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.... under the Intermediaries Regulations. 5.3. Firm-level performance reporting by Portfolio Managers56 5.3.1. The firm-level performance data of Portfolio Managers shall be audited annually. Confirmation of compliance with paragraph 4.5.3 of this Master Circular shall be reported to SEBI within sixty days of end of each financial 56 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 Page 43 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India year. The said report to SEBI shall be certified by the Directors/Partners of the Portfolio Manager or by person(s) authorized by the Board of Directors/Partners of the Portfolio Manager. 5.4. Offsite Inspection data reporting to SEBI 5.4.1. As a part of off-site inspection and surveillance of Portfolio Managers and to monitor the compliance of the PM Regulations and circulars issued therein, SEBI has framed the data structure and all the Portfolio Managers are required to furnish the data to SEBI under the following heads/reporting formats: S. No. Tabl....

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....ES AND CHARGES 6.1. Regulation of Fees and Charges 6.1.1. The inter se relationship between the portfolio manager and client, mutual rights, liabilities and obligations relating to management of funds or portfolio of securities are required to be specified in the agreement signed between the portfolio manager and the client. The contents of the portfolio manager-client agreement are laid out in the PM Regulations60. 6.1.2. In order to bring about greater uniformity, clarity and transparency with regard to fees and charges, portfolio managers are advised to take the following measures in respect of all client agreements: 6.1.3. Fees and Charges 61 62 6.1.3.1. As provided in the PM Regulations 63, no upfront fees shall be charged by the Portfolio Managers, either directly or indirectly, to the clients 64. 6.1.3.2. Brokerage at actuals shall be charged to clients as expense. 6.1.3.3. 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 AUM. 6.1.3.4. Charges for all transactions in a financial year (Broking, Demat, custody etc.) through self or associate....

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.... and Exchange Board of India water mark of *60,00,000, rather than on the full return during that year from 55,00,000 to 65,00,000. 6.1.3.7. All fees and charges shall be levied on the actual amount of clients' assets under management. 6.1.3.8. High Water Mark shall be applicable for discretionary and non- discretionary services and not for advisory services. 6.1.3.9. In case of interim contributions/ withdrawals by clients, performance fees may be charged after appropriately adjusting the high water mark on proportionate basis. 6.1.4. Exit Load:66 6.1.4.1. In case client portfolio is redeemed in part or full, the exit load charged shall be as under: 6.1.4.1.1. In the first year of investment, maximum of 3% of the amount redeemed. 6.1.4.1.2. In the second year of investment, maximum of 2% of the amount redeemed. 6.1.4.1.3. In the third year of investment, maximum of 1% of the amount redeemed. 6.1.4.1.4. After a period of three years from the date of investment, no exit load. 66 SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020 Page 48 of 100 GB भारतीय प्रतिभूति और à....

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.... complaints received by them in the format mentioned in Annexure 7A of this Master Circular. The information shall be made available by 07th of the succeeding month. 7.2.2. Further, the Portfolio Managers are advised to display link/option on their websites and mobile apps so as to enable their clients to lodge complaint with them directly. Additionally, link to SEBI Complaints Redress System ("SCORES") website and the link to download the SCORES mobile app may also be provided by the Portfolio Managers on their websites. 71 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010 72 2 Regulation 22 read with clause 18 of Schedule IV of the SEBI (Portfolio Managers) Regulations, 2020 73 SEBI/HO/IMD/IMD-II_DOF7/P/CIR/2021/681 dated December 10, 2021 Page 50 of 100 B भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India ANNEXURES 1 Annexure 1A: Online Processing of Portfolio Manager Applications 2 Annexure 2A: Guidelines for Advertisements by Registered Portfolio Managers 3 Annexure 2B: Code of Conduct for Distri....

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....ls and save it. i. Once the details relating to fees are entered and saved, it must be adjusted against the outstanding amount as per the instructions given in the "blue question mark" on the top right hand corner of the page. j. Once the fees are adjusted, the fee details must be saved and then submitted, by clicking the "Submit" button in the e-mail, to SEBI for final approval. Page 52 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Online Process for Updation of Information a. There can be any change in information that a registered Portfolio Managers can undergo during its operations. b. Apart from sending the physical copy of such changes in information to SEBI, the same should be updated on the SEBI Intermediary Portal. c. It can be done by clicking "Updation of Registration" under the tab "Portfolio Manager" given on the SEBI Intermediary Portal. d. All instructions to fill the details under every tab can be accessed by clicking the "Blue Question Mark" on the top right hand corn....

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....sement is set forth in a clear, concise and understandable manner. Extensive use of technical or legal terminology or complex language and the inclusion of excessive details which may detract the investors should be avoided. 1.6. The advertisement shall not contain information, the accuracy of which is to any extent dependent on assumptions. 1.7. The advertisement shall not contain any promise or guarantee of assured/fixed return to the investors, either directly or indirectly. 1.8. The advertisement shall not compare one Portfolio Manager with another, implicitly or explicitly, unless the comparison is fair and all information relevant to the comparison is included in the advertisement. 2. OBSERVANCE OF CODE OF ADVERTISEMENT 2.1. Every Portfolio Manager shall strictly observe the Code of Advertisement set out in paragraph 1 given above. Any breach of the Code would be construed as breach of Code of conduct set out in Schedule III to the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020. Page 55 of 100 GB भारतीय प्रतिभूति और विनि....

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....racting clients through unethical means such as offer of rebate/gifts etc. Maintain necessary infrastructure to provide support to clients in timely receipt of disclosure document, statement of portfolio and performance, statement of fees, audit report, etc. Maintain confidentiality of clients' details, deals and transactions, which they come to know in their business relationship. Abstain from making negative statements about other Portfolio Managers or Investment Approaches. Make comparisons, if any, only with the similar and comparable products along with complete facts. Not indulge in any manipulative, fraudulent or deceptive practices or spread rumours with a view to make personal gain. Hold valid Certification, as specified by SEBI, at all times. **** Page 57 of 100 GB भारतीय प्रतिभूति और और विनिमय बोर्ड Securities and Exchange Board of India Annexure 3A: Format of obtaining the consent from the client 1. This document is for obtaining the consent/dissent for investment by Portfolio Manager in its asso....

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....hin the limits agreed upon at paragraph 5 above. ☐ Dissent: Portfolio Manager cannot invest in the securities of its associates/related parties. Page 59 of 100 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Waiver from rebalancing of portfolio on passive breach of investment limits Consent: Portfolio Manager need not rebalance the portfolio on passive breach of investment limits. Dissent: Portfolio Manager should rebalance the portfolio on passive breach of investment limits. Page 60 of 100 Signature of the client GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Annexure 4A: Illustration for Annexure on Fees and Charges 74 This computation is for illustrative purpose only. Portfolio Managers may suitably modify this to reflect their fees and charges. The assumptions for the illustration are as follows: a. Size of sample port....

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....rges/any other similar charges (e.g. 2% of Rs.50,00,000) 1,00,000 Less: Management Fees (if any) (e.g. 2% of 50,00,000) 1,00,000 XX Less: Performance fees (if any) XX Less: Any other fees (please enumerate) Total charges during the year 2,00,000 Net value of the portfolio at the end of the 38,00,000 year % change over capital contributed (24.00%) Charges on Portfolio performance: No change Nature of Fees Amount in Amount in Capital Contribution Less: Any other fees (please enumerate) 50,00,000 XX Assets under Management 50,00,000 Add: Profits/Losses on investment during the year @ 0% on assets under management 0 Page 62 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India 50,00,000 Gross value of the portfolio at the end of the year Less: Brokerage/DP charges/any other similar charges (e.g. 2% of Rs.50,00,000) 1,00,000 Less: Management Fees (if any) (e.g. 2% of 50,00,000) 1,00,000 0 Less: Performance fees (if any) XX Less: Any other fees (please enumerate) Total cha....

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....rofile. Under the Discretionary Portfolio Management service, investment decisions are at the sole discretion of the PMS provider if they are in sync with the investor's investment objectives. Under the Non-Discretionary Portfolio Management service, investment decisions taken at the discretion of the Investor. ii. Investment Advisory Services: - Under these services, the Client is advised on buy/sell decision within the overall profile without any back-office responsibility for trade execution, custody of securities or accounting functions. The PMS provider shall be solely acting as an Advisor to the Client and shall not be responsible for the investment/divestment of securities and/or administrative activities on the client's portfolio. The PMS provider shall act in a fiduciary capacity towards its Client and shall maintain arm's length relationship with its other activities. The PMS provider shall provide advisory services in accordance with guidelines and/or directives issued by the regulatory authorities and/or the Client from time to time in this regard. iii. Client On-boarding a. Ensuring compliance with KYC and AML guidelines. b. franking & signing the Pow....

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.... from receipt of all requisite documents from the client, subject to review of the documents for accuracy and completeness by portfolio manager and allied third party service providers as may be applicable. 4 сл 5 Registration of nominee in account and demat PMS account. Modification of nominee in PMS account. Registration of nominee should happen along with account opening, therefore turnaround time should be same as account opening turnaround time. 10 days from receipt of requisite nominee account and demat modification form, subject to review of the documents for accuracy and completeness by Page 67 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Sr. No. Service / Activity CO 6 7 Timeline portfolio manager and allied third party service providers as may be applicable. Uploading of PMS account in 10 days from date of account opening KRA and CKYC database. Whether portfolio manager is registered with SEBI, then SEBI registration number. (Portfolio Manager may r....

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....­à¤¾à¤°à¤¤à¥€à¤¯ प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Sr. No. Service / Activity 19 Timeline POA taken copy providing to Within 3 days of client request. client. At the time of client signing the agreement; this information should be a part of the account opening form. 20 Intimation to client about what all transactions can portfolio manager do using PoA. 21 Frequency of providing Annual. 22 audited reports to clients 22 Explanation of risks involved in At the time of client signing the agreement; this information should be a part of the investment. account opening form. 23 23 24 24 25 Intimation of tenure of portfolio Indicative tenure should be disclosed at the investments. Intimation clearly providing restrictions imposed by the investor on portfolio manager. Intimation regarding settling of client funds and securities. time of client signing the agreement; this information should be a part of the account opening form. Negative list of securities should be taken from the client at the....

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....er who attends to the investor queries and complaint should be provided in the PMS Disclosure document. c. The grievance redressal and dispute mechanism should be mentioned in the Disclosure Document. d. Investors can approach SEBI for redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned PMS provider and follows up with them. e. 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. E. Expectations from the investors (Responsibilities of investors) 1. Check registration status of the intermediary from SEBI website before availing services. 2. Submission of KYC documents and application form in a timely manner with signatures in appropriate places and with requisite supporting documents. 3. Read carefully terms and conditions of the agreement before signing the same. Page 72 of 100 GB भारतीय प्रतिभूति और विनिमय बोर्ड ....

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....otal ** Inclusive of complaints of previous years resolved in the current year. ## Inclusive of complaints pending as on the last day of the year. Page 96 of 100 भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India Annexure Z: List of Circulars Rescinded Sr. No. Date of Subject Circular Ref. No. 1. October Format of Half Yearly RPM circular No.1(93-94) 20, 1993 Report and Guidelines for 2. advertisement September Clarification for definition RPM CIRCULAR NO.1 (2002- 17, 2002 of associates 2003) 3. January Application procedure for 14, 2003 registration/renewal as SEBI/RPM CIRCULAR NO.2 (2002-2003) Portfolio Manager 4. February Clarification for 05, 2003 amendment to Reg.16(1)(b) & Reg. SEBI/RPM CIRCULAR NO.3 (2002-2003) 16(3) 5. November Improvement in corporate IMD/PMS/CIR/1/21727/03 18, 2003 governance 6. June 28, 2006 Clause in disclosure SEBI/IMD/CIR No. 1/70353/2006 document/ agreement/ power of attorney 7. May 11, 2007 Renewal of certificate of registration 8.....