An Overview of Portfolio Manager Registration with SEBI

In India, a Portfolio Manager is a body corporate that advises or directs on behalf of the client (whether as a discretionary portfolio manager or otherwise), the administration/management of a portfolio of securities or the funds of the client. In simple terms, a professional individual who makes investment decisions & carries out investment activities on behalf of an institution or person is known as Portfolio Manager. In India, Portfolio Managers are also known as investment counselors, asset managers, or investment managers. According to the Securities Exchange Board of India (Portfolio Managers) Regulations, 2020, before starting to work as a portfolio manager, the person has to apply for Portfolio Manager Registration with SEBI and obtain a Registration Certificate from SEBI. Whizseed has a team of SEBI experts who can help you with Portfolio Manager Registration under SEBI.

How to Become a Portfolio Manager in India?

To become a registered Portfolio Manager with SEBI in India you have to follow the following conditions:

• Educational Qualifications: You must have a bachelor's degree or master’s degree in Economics, Business Administration or Finance.
• Certifications: To become a Portfolio Manager you need CFA (Chartered Financial Analyst), CFP (Certified Financial Planner) Certification.
• Required Skills: You must have a strong analytical & decision-making skills, must have knowledge about financial market, risk assessment & asset allocation.
• Experience: You worked as a financial analyst, fund manager, or investment banker before becoming a Portfolio Manager. You have done internships & have experience in equity research & wealth management firms.
• Career Prospects: Portfolio Managers work in hedge funds, investment banks, mutual funds, and wealth management firms.
• Building a strong network & always updated with financial trends is very important for success in this field.

Types of Portfolio Manager

There are 2 different types of Portfolio Manager:

1. Discretionary Portfolio Manager: An individual or a person independently manages the client’s funds as per the client's requirements.

2. Non-Discretionary Portfolio Manager: In this type, funds are manages as per the client’s directions.

Different Roles of a Portfolio Manager in India

The most important role of a Portfolio Manager is to manage the investment portfolio of a client independently (discretionary Portfolio Manager Service) or to help the client (non-discretionary & advisory PMS) in investment activities. The SEBI has regulated the most critical roles & responsibilities of a portfolio manager. Here are some of them:

• Provide an idea of client portfolios that clients can access at any time;
• They provide quick support or customer service if the client has queries;
• They take care that the portfolio management is happening in line with the contract or agreement with the client;
• They also recommend or make changes in the investment portfolio as & when required;
• Portfolio Manager gives regular portfolio updates to clients to keep them informed about investment activities in their portfolios;
• They also provide market updates to clients to keep them informed regarding important events that may impact their money.

Eligibility Criteria for Portfolio Manager Registration with SEBI

To apply for Portfolio Manager Registration under SEBI, one needs to get themselves registered from the authority. The applicant must send an application for the Registration to the SEBI along with the documents. Then the SEBI will examines the application on the following criteria to decide whether the application is eligible for the Portfolio Manager Registration or not.

1. The applicant must be a corporate body;

2. The applicant must have a sufficient infrastructure necessary to support the activities of the portfolio manager. The infrastructure includes important equipment, office space & essential human resources;

3. The objective of the applicant should indicate his/her work to be in general interest of the investors;

4. A minimum net worth of Rs. 5 crores;

5. The applicant’s organization must have a minimum of 2 employees with at least 5 years of experience in activities like fund or investment management and stockbroking;

6. The Principal Officer (PO) of the applicant entity must have any of the following qualifications:

• Experience of a minimum of 10 years in activities regarding securities market, portfolio manager, stockbroker, or fund manager;
• CFA charter;
• Professional qualification from a recognized institution/university in the area of law, accountancy, business management & finance.

7. The application will be rejected in the following cases:

• If an earlier application from the same applicant was rejected by the board;
• If he PO or an administrative officer of the applicant organization is involved in any litigation;
• If the board has conducted any disciplinary action against any individual who has directly or indirectly connected with the applicant;
• Convicted/found guilty of any financial offence or anything involving moral turpitude.

8. He or she must have relevant NISM Certification;

9. The applicant must be a fit & proper person.

10. The capital adequacy must not be less than a net worth of Rs. 50 lakhs.