In an FAQ on PMS, SEBI has clarified that existing clients who have invested in PMS with Rs.25 lakh (earlier regulations) will have to invest such that they meet minimum investment value of Rs.50 lakh in PMS. For instance, if an investor has Rs.30 lakh in PMS, he has to invest another Rs.20 lakh to meet the minimum investment criteria if he wishes to top up his investment portfolio in PMS.
In addition, SEBI has clarified that partial withdrawal is allowed in PMS to the extent that they maintain a minimum investment value of Rs. 50 lakh in PMS. SEBI said, “The client may withdraw partial amounts from his portfolio, in accordance with the terms of the agreement between the client and the portfolio manager. However, the value of investment in the portfolio after such withdrawal shall not be less than the applicable minimum investment amount.”
Here are the other key clarifications in the SEBI FAQ on PMS:
- PMS players will have to disclose distributor commissions to investors in a quarterly report sent to clients
- PMS players and distributors will have to ensure that prospective investors are well informed about the fees or commission earned by their distributors before on-boarding them
- PMS players cannot impose lock-in period on the investments of their clients. However, PMS players can charge exit loads from the clients for early exit
