The Securities and Exchange Board of India (SEBI) has issued a crucial circular, SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/32, on May 02, 2024. This circular addresses the collective oversight of distributors for Portfolio Management Services (PMS) through the Association of Portfolio Managers in India (APMI).
1. Regulatory Framework: Regulation 23 (11) of SEBI (Portfolio Managers) Regulations, 2020, mandates portfolio managers to ensure that distributors comply with regulations and circulars.
2. Code of Conduct: Portfolio Managers must ensure that distributors adhere to the specified Code of Conduct outlined in Annexure 2B to the Master Circular dated March 20, 2023.
3. Review and Recommendations: A working group reviewed the regulatory framework and suggested measures for enhancing ease of doing business. Public consultations were conducted based on these recommendations.
4 Collective Oversight: To simplify compliance, SEBI has mandated that any entity distributing portfolio management services must register with APMI. Portfolio Managers are responsible for ensuring distributor registration with APMI according to its criteria.
5. Effective Date: The circular will be effective from January 01, 2025. APMI will release distributor registration criteria by July 01, 2024.
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Securities and Exchange Board of India
Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/32 Dated: May 02, 2024
To
All Portfolio Managers
Association of Portfolio Managers in India (APMI)
Madam/ Sir,
Sub: Facilitating collective oversight of distributors for Portfolio Management Services (PMS) through APMI
1. Regulation 23 (11) of SEBI (Portfolio Managers) Regulations, 2020, inter-alia states that the portfolio manager shall ensure that any person or entity involved in the distribution of its services is carrying out the distribution activities in compliance with the SEBI (Portfolio Managers) Regulations, 2020 and circulars issued thereunder from time to time.
2. Additionally, Portfolio Managers are required to ensure that distributors abide by the Code of Conduct as specified in Annexure 2B to the Master Circular dated March 20, 2023 for Portfolio Managers.
3. In order to simplify and ease compliances, a working group was constituted to review the present regulatory framework under SEBI (Portfolio Managers) Regulations, 2020 and recommend measures to promote ease of doing business. Based on the recommendations of the working group, a public consultation was carried out.
4. Pursuant to the above, in order to facilitate collective oversight of PMS distributors at the industry level, it has been decided that any person or entity involved in the distribution of portfolio management services shall obtain registration with APMI. Portfolio Managers shall ensure that any person or entity engaged in the distribution of its services has obtained registration with APMI, in accordance with the criteria laid down by APMI.
5. This circular shall come into effect from January 01, 2025. APMI shall issue the criteria for registration of distributors by July 01, 2024.
6. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 43 of SEBI (Portfolio Managers) Regulations, 2020, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
7. This circular is available at sebi.gov.in under the link “Legal ->Circulars”.
Yours faithfully,
Peter Mardi
Deputy General Manager
+91-22-26449233
peterm@sebi.gov.in
