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Taking a tough stance against non-compliant distributors, SEBI has directed PMS players—through the Association of Portfolio Managers in India (APMI)—to withhold commissions from distributors who do not have APMI Registration Numbers (APRNs).
In a clarification, SEBI instructed PMS players to withhold commissions on new assets sourced by distributors who have obtained the NISM certificate but are yet to register with APMI. This withholding will apply from January 1, 2025, to July 31, 2025 or until the distributor obtains an APRN, whichever is earlier.
PMS players will release the withheld commission only after the distributor completes registration with APMI.
Earlier, in May 2024, SEBI made it mandatory for PMS distributors to obtain an APRN by January 1, 2025, to be eligible to sell PMS products.
Furthermore, if a distributor fails to register with APMI by July 31, 2025, PMS players will not be allowed to accept new business from them or pay any commissions.
Additionally, any commission income generated on assets built between January 1, 2025, and July 31, 2025, will be credited back to PMS investors. No commission will be charged from the total expense of the scheme thereafter, SEBI stated.
For assets built before January 1, 2025, distributors will continue to receive commission until July 31, 2025. After that, non-compliant distributors will not be eligible for commissions and PMS players must stop charging any commission from the total expense of the scheme for such distributors.
Non-individual distributors who have obtained or are in the process of obtaining an APRN must complete the Employee Unique Identification Number (EUIN) registration by July 31, 2025. EUIN holders engaged in the sale of PMS products must also clear the NISM certification, clarified SEBI.
