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PMS firms will now have to give clients an option to exit without any exit load in case of change in control, SEBI said. In addition, they will also have to inform their investors about the change in ownership at least a month in advance.
"The portfolio manager shall inform its existing investors/ clients about the proposed change prior to effecting the same and give an option to exit without any exit load, within a period of not less than 30 calendar days, from the date of such communication," SEBI said.
The directives are part of a new set of norms issued by SEBI with respect to change in control of PMS firms.
According to the new norms, PMS firms will have to seek SEBI's approval for the ownership change on the regulator's online portal siportal.sebi.gov.in.
The approval will be valid for 6 months. This means that the change in control has to happen within six months from getting SEBI's go ahead.
In case, the change in control requires approval from the National Company Law Tribunal (NCLT), the PMS firm will have to first get an in-principle approval before approaching the NCLT.
Once NCLT's approval arrives, the PMS firm can apply for SEBI's final go ahead by submitting the copy of NCLT order.
The new norms will come into effect from June 15, 2022.