August 26, 2022
To,
All Portfolio Managers
Dear Sir / Madam,
1. The amendment to SEBI (Portfolio Managers) Regulations, 2020 (“PMS Regulations”) notified on August 22, 2022 (available at link), inter-alia mandates prudential limits on investments in associates/related parties of Portfolio Manager, the requirement of taking prior consent of client for such investments and restrictions based on the credit rating of securities. The definitions of the terms “related party” and “associate” have been provided in the PMS Regulations. The amendment to PMS Regulations shall come into force on the thirtieth day from the date of their publication in the Official Gazette.
2. Pursuant to the above, the Portfolio Managers shall ensure compliance with the following :
A. Limits on investment in securities of associates / related parties of Portfolio Managers
Regulation 24 (3A) of PMS Regulations inter-alia provides that the Portfolio Manager shall ensure compliance with the prudential limits on investment as may be specified by the Board. Accordingly, the Portfolio Managers shall ensure the following:
i Portfolio Manager shall invest up to a maximum of 30 percent of their client’s portfolio (as a percentage of the client’s assets under management) in the securities of their own associates/related parties. Further, the Portfolio Manager shall ensure compliance with the following limits :
To Read More….
Click the link below….
Circular : https://www.dropbox.com/s/0vmzqsqhoxq22w7/Circular%20for%20Portfolio%20Managers.pdf?dl=0