The Hindu Business Line : Portfolio Manager

Any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the case may be is a portfolio manager.

What is the difference between a discretionary portfolio manager and a non- discretionary portfolio manager?

The discretionary portfolio manager individually and independently manages the funds of each client in accordance with the needs of the client in a manner, which does not partake character of a Mutual Fund, whereas the non-discretionary portfolio manager manages the funds in accordance with the directions of the client.

What is the procedure of obtaining registration as a portfolio manager from SEBI?

An applicant for registration as a portfolio manager is required to pay a non-refundable application fee of Rs 25,000/- by way of demand draft drawn in favour of `Securities and Exchange Board of India', payable at Mumbai. The fee has to be forwarded to Treasury & Accounts Division, SEBI, 15th Floor, Earnest House, Nariman Point, Mumbai - 400 021. The application in Form A along with additional information (Form A and additional information available on SEBI Web site: www.sebi. gov.in.) and copy of the receipt of the application fee is to be submitted to the Division of Funds, SEBI, Exchange Plaza, "G" Block, 4th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.

What does SEBI consider while granting the certificate of registration to the applicant?

SEBI takes into account all matters which it deems relevant to the activities relating to portfolio management. The applicant has to be a body corporate and must have necessary infrastructure like adequate office space, equipments and the manpower to effectively discharge the activities of a portfolio manager. The principal officer of the applicant should have the professional qualifications in finance, law, accountancy or business management from an institution recognised by the Government. The applicant should have in its employment minimum of two persons who, between them, have at least five years experience as portfolio manager or stock broker or investment manager or in the areas related to fund management. The applicant also has to fulfil the capital adequacy requirements, etc.

Who is the principal officer of a portfolio manager?

Principal officer means a director of the portfolio manager who is responsible for the activities of portfolio management and has been designated as principal officer by the portfolio manager.

What is the capital adequacy requirement of a portfolio manager?

The portfolio manager is required to have a minimum networth of Rs 50 lakh.

Is there any registration fee to be paid by the portfolio managers?

Yes. Every portfolio manager is required to pay a sum of Rs 5 lakh as registration fees at the time of grant of certificate of registration by SEBI.

How long does the certificate of registration remain valid?

The certificate of registration remains valid for three years.

Are the portfolio managers required to pay annual fee to SEBI?

No, the portfolio managers are not required to pay any annual fee to SEBI.

What is the procedure of renewing the certificate of registration?

The portfolio manager who wants to renew its certificate of registration has to make an application for renewal in Form A three months before the expiry of the validity of the certificate.

The portfolio manager is required to pay Rs 2.50 lakh as renewal fees to SEBI.

www.sebi.gov.in

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