Assets Under Management AUM

Sebi: Sebi asks major PMS vendors to provide details

Mumbai: The capital markets regulator is taking a close look at the investments of big portfolio management service (PMS) providers – the branches of brokerage houses and asset managers that handle the money of the rich and ultra-wealthy .

About a week ago, the Securities Exchange Board of India (Sebi) asked some of them to disclose details related to various schemes as of February 28, 2022 and compare client portfolios within a investment theme (such as “long only”, “high growth”, etc.).

“The regulator has not said why he wants the information. But PMS houses were asked to submit within one day,” a fund house compliance officer said.

The information sought by Sebi is: 1) details of assets under management (AUM) and number of clients under discretionary PMS, non-discretionary PMS and advisory PMS; 2) details of the investment approach of the number of clients and assets under management; 3) AUM and details of clients not covered by any investment approach; and, 4) degree of overlap in each client’s portfolio under the same approach.

A Sebi spokesperson had no comment on the matter.

A large number of high net worth individuals typically choose to put a portion of their money into PMS programs and alternative investment funds (AIFs) such as private equity and venture capital firms. In the discretionary portfolio management service, the portfolio manager manages each client’s funds and securities in accordance with the clients’ “needs” while under “non-discretionary”, the portfolio manager manages the funds in accordance with the client’s “instructions”. customer. .

“Sebi seems to look at the strategies followed by PMS providers… Some PMS providers follow a model portfolio while others also offer a customized portfolio based on investor appetite. Now the portfolios of two clients under the same theme may differ even if they have a similar risk profile,” said an official of a financial intermediary.

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