Listen to this article
SEBI has made on-boarding of PMS clients completely digital.
In its latest circular, SEBI has allowed PMS players to obtain digital letter and signature instead of handwritten note and wet signature.
So far, all investors were required to submit a handwritten note along with wet signature on a letter declaring that they have understood the fees and charges associated with PMS. Due to this requirement, digital onboarding of PMS clients was not possible.
With SEBI’s new norms, PMS clients can be onboarded completely online along with physical route. However, such a declaration has to be typed using keyboard or written electronically using fingers or a stylus pen.
SEBI has asked the Association of Portfolio Managers in India (APMI) to issue standard guidelines on digital onboarding for portfolio managers.
This will come into effect from October 1, 2024.
Among other key development are:
Portfolio managers (PMs) will have to provide a tool that can help their clients calculate fee that too with multi year calculation. Applicability – October 1, 2024
PMs also need to factor in performance based fees if any and cover different scenario. Applicability – October 1, 2024
PMs will have to issue periodic reports. Applicability – October 1, 2024
PMs will have to issue Most Important Terms and Conditions (MITC) documents to newly onboarded clients as well as existing clients. Applicability – January 1, 2025
APMI will suggest standard format of all these documents.