THE GAZETTE OF INDIA
EXTRAORDINARY
PART III – SECTION 4
PUBLISHED BY AUTHORITY
NOTIFICATION
Bombay, the 7th January, 1993

SECURITIES AND EXCHANGE BOARD OF INDIA (PORTFOLIO
MANAGERS) REGULATIONS, 1993

SEBI/LE/92/III.─In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India hereby makes the following regulations, namely:─

CHAPTER I
PRELIMINARY

1. Short title and commencement.─(1) These regulations may be called the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993.

(2) They shall come into force on the date1 of their publication in the Official Gazette.

2. Definitions.─In these regulations, unless the context otherwise requires,─

1 7th January, 1993, vide S.O. No. SEBI/LE/92/III, dated 7-01-1993, Gazette of India,  Extraordinary, 1993, Part III, section 4.

1[(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);]

2[(aa)] 3[* * *]

4[(aa) “body corporate” shall have the meaning assigned to it in or under clause (7) of  section 2 of the Companies Act, 1956 (1 of 1956);

(ab) “certificate” means a certificate of registration issued by the Board;

(ac) “change of status or constitution” in relation to a portfolio manager─

(i) means any change in its status or constitution of whatsoever nature; and

(ii) without prejudice to generality of sub-clause (i), includes–

(A) amalgamation, demerger, consolidation or any other kind of corporate restructuring falling within the scope of section 391 of the Companies Act, 1956 (1 of 1956) or the corresponding provision of any other law for the time being in force;

(B) change in its managing director or whole-time director; and

1 Inserted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006, w.e.f. 7-9-2006.

2 Clause (a) renumbered as (aa) by the SEBI (Portfolio Managers) (Amendment) Regulations, 2002, w.e.f. 11-10-2002.

3 Omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2002. Prior to its omission, clause (aa) read as under:

“(aa) “Enquiry Officer” means any officer of the Board, or any other person, having experience in dealing with the problems relating to the securities market, who is authorized by the Board under Chapter V;”

4 Inserted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006, w.e.f. 07-09-2006.

(C) any change in control over the body corporate; (ad) “change in control”, in relation to a portfolio manager being a body corporate, means:─

(i) if its shares are listed on any recognized stock exchange, change in control within the meaning of regulation 12 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997; (ii) in any other case, change in the controlling interest in the body corporate;

Explanation.─For the purpose of sub-clause (ii), the expression “controlling interest” means an interest, whether direct or indirect, to the extent of at least fifty one percent of voting rights in the body corporate;]

1[(ae)] “chartered accountant” means a chartered accountant as

defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;]

2[(af) “discretionary portfolio manager” means a portfolio manager who exercises or may, under a contract relating to portfolio management, exercise any degree of discretion as to the investments or management of the portfolio of securities or the funds of the client, as the case may be;]

(b) “form” means a form specified in Schedule I;

1 Inserted by the SEBI ((Portfolio Managers) (Amendment) Regulations, 2002 w.e.f. 11- 10-2002, as clause (a); renumbered as clause (ae) by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006 w.e.f. 07-09-2006.

2 Inserted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006 w.e.f. 07-09-2006.

(c) “inspecting authority” means one or more persons appointed by the Board to exercise powers conferred under Chapter IV;

1[(ca) “portfolio” means the total holdings of securities belonging to any person;

(cb) “portfolio manager” means 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;]

2[(d) “principal officer” means an employee of the portfolio manager who has been designated as such by the portfolio manager;]

[(e)] 3[* * *]

4[(ea) “securities lending” means the securities lending as per the Securities Lending Scheme, 1997 specified by the Board;]

1 Inserted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006 w.e.f. 07-09-2006.

2 Substituted by the SEBI (Portfolio Managers) (Amendment) Regulations, 2006 w.e.f. 05-07-2006. Prior to its substitution, clause (d) as substituted by the SEBI (Portfolio Managers) (Amendment) Regulations, 2002, w.e.f. 11-10-2002 read as under:

“(d) “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;”

3 Omitted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006 w.e.f. 07-09-2006. Prior to its omission, clause (e) read as under:

“(e) “rules” means Securities and Exchange Board of India (Portfolio Managers) Rules, 1992;”

4 Inserted by the SEBI (Portfolio Managers) (Amendment) Regulations, 2002, w.e.f. 11- 10-2002.

(f) Words and expressions used and not defined in these regulations but defined in the Act 1[* * *] shall have the meanings respectively assigned to them in the Act 2[* * *].

CHAPTER II
REGISTRATION OF PORTFOLIO MANAGERS

3[3. Registration as portfolio manager.─No person shall act as portfolio manager unless he holds a certificate granted by the Board under these regulations:

Provided that a merchant banker acting as a portfolio manager immediately before commencement of the Securities and Exchange Board of India (Portfolio Managers) (Second Amendment) Regulations, 2006 may continue to do so for a period of six months from such commencement or, if he has made an application for registration under these regulations within the said period of six months, till the disposal of such application.]

4[3A. Application for grant of certificate.─5[(1) An application by a portfolio manager for the grant of a certificate shall be made to the Board in Form A and shall be accompanied by a non-refundable application fee,

1 The words “and the rules” omitted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006 w.e.f. 07-09-2006.

2 The words “or the rules, as the case may be” omitted, ibid.

3 Inserted by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006, w.e.f. 07-09-2006.

4 Regulation ‘3’ renumbered as ‘3A’ by the SEBI (Portfolio Managers) (Second Amendment) Regulations, 2006, w.e.f. 07-09-2006.

5 Substituted by the SEBI (Portfolio Managers) (Amendment) Regulations, 2004, w.e.f. 27-05-2004. Prior to its substitution, sub-regulation (1) read as under:

“(1) An application by a portfolio manager for a grant of a certificate shall be made to the Board in Form A.”

as specified in clause (1) of Schedule II, to be paid in the manner specified in Part B thereof.]

(2) Notwithstanding anything contained in sub-regulation (1), any application made by a portfolio manager prior to coming into force of these regulations containing such particulars or as near thereto as mentioned in Form A shall be treated as an application made in pursuance of sub-regulation (1) and dealt with accordingly.]

4. Application to conform to the requirements.─Subject to the provisions of sub-regulation (2) of regulation 3, any application, which is not complete in all respects and does not conform to the instructions specified in the form, shall be rejected:

Provided that, before rejecting any such application, the applicant shall be given an opportunity to remove within the time specified such objections as may be indicated by the Board.

5. Furnishing of further information, clarification and personal representation.─(1) The Board may require the applicant to furnish further information or clarification regarding matters relevant to his activity of a portfolio manager for the purposes of disposal of the application.

(2) The applicant or, its principal officer shall, if so required, appear before the Board for personal representation.

1[6. Consideration of application.─(1) For considering the grant of certificate of registration to the applicant, the Board shall take into account.

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One response to “SEBI: (Portfolio Managers) Regulations, 1993”

  1. Ashu says:

    Required the audit report format form Portfolio Management Audit which required to give by Auditor.
    If anyone has the format kindly send it on below mentioned email id

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