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SEBI has issued a warning to two PMS players - DGS Capital Management and Scient Capital for not meeting net worth requirements.
SEBI has also given them 15 days to bring the required net worth capital, during this time, they are neither allowed to accept new clients nor accept funds from existing clients. According to SEBI norms, PMS players have to maintain a minimum net worth of Rs.5 crore.
If the two players fail to meet net worth requirements, they cannot onboard new clients and will have to transfer their assets to another PMS provider.
SEBI said, "Net worth requirement is meant for determining the financial health of the company/organization. It is required to ensure that only serious and sound players who can provide the required infrastructure for the capital market can enter the market. The impact on the net worth could be very high in extreme scenarios."
Further, the regulator has directed these two companies to give reply to show cause notice within 21 days of receiving this notice on why they have not complied with the regulatory guidelines.
DGS Capital Management has 19 clients and an AUM of Rs. 201 crore in December 2024 whereas Scient Capital has 86 clients and an AUM of Rs. 67 crore in December 2024.
