Portfolio managers need to provide disclosure document, comprising quantum and manner of payment of fees payable for each activity, to clients before entering into an agreement with them, Sebi said

Portfolio managers need to provide disclosure document, comprising quantum and manner of payment of fees payable for each activity, to clients before entering into an agreement with them, markets regulator Sebi has said.

A portfolio manager is a body corporate, which pursuant to a contract with a client, advises or directs or undertakes on behalf of the client the management of a portfolio of securities or funds.

In a detailed set of Frequently Asked Questions (FAQs) on portfolio managers, Sebi said the disclosure document contains the quantum and manner of payment of fees payable by the client for each activity, portfolio risks and complete disclosures in respect of transactions with related parties.

In addition, performance and the audited financial statements of the portfolio manager for the immediately preceding three years need to be disclosed in disclosure document, it added.

“The portfolio manager provides to the client the disclosure document prior to entering into an agreement with the client,” the regulator said.

The Securities and Exchange Board of India (Sebi) said it does not approve any of the services offered by the portfolio manager.

It further said an investor has to invest in the services based on the terms and conditions laid out in the disclosure document and the agreement between the portfolio manager and the investor.

Team – Intellex Strategic Consulting Private Limited

Intellexconsulting.com, Startupstreets.com, Intellexfinance.com, Yuvamorcha.com

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