Clarification regarding amendment to SEBI (Portfolio Managers) Regulations, 2020

Sr. No.

Particulars

Comments/ Remarks

1

Procedure for undertaking of Co-investment portfolio management services:

The Co-investment portfolio management services shall be provided in the following manner:

i. A Manager of an AIF who is also a SEBI registered Portfolio Manager, and intends to offer Co-investment services through portfolio management route, shall do so only under prior intimation to SEBI.

ii. Any other Manager who is not a SEBI registered Portfolio Manager, and intends to offer Co-investment services through portfolio management route, shall seek registration from SEBI as a Portfolio Manager in terms of the PMS Regulations. Pursuant to grant of registration, if such Portfolio Manager is desirous of offering portfolio management services other than Co-investment, the same shall be subject to compliance with all provisions of the PMS Regulations including eligibility criteria, and with the prior approval of SEBI.

a. Manager of an AIF who is also SEBI registered Portfolio Manager: Prior intimation to SEBI.

b. Any other Manager who is not a SEBI registered Portfolio Manager (PM): Such person shall firstly register himself as a PM with SEBI and the registration will be valid to the extent of providing Co-investment services through portfolio management route. Post to such registration, if he wants to offer portfolio management services other than Co-investment, then he has to comply with all provisions of the PMS Regulations and shall also take prior approval of SEBI.

2

Periodic reporting by Portfolio Managers

i. In partial modification to provisions of Circular No. SEBI/HO/IMD/DF1/CIR/P/2021/02 dated January 08, 2021, Portfolio Managers shall submit a monthly report regarding their portfolio management activity, on SEBI Intermediaries Portal within 7 working days of the end of each month, as per the revised format enclosed at Annexure A, which includes details of Co-investment offered by Portfolio Manager.

ii. Further, in modification to paragraph D.12 of Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020, Portfolio Managers shall furnish a report to their clients on a quarterly basis, as per the revised format enclosed at Annexure B, which includes details of Co-investment offered by Portfolio Manager.

Revised formats for monthly reports to SEBI and quarterly reports to clients are introduced so as to include the component of Co-investment offered by Portfolio Manager.

The reporting requirements as per the revised formats shall be applicable from 1^st April, 2022 onwards.

3

Fees and charges

In partial modification to paragraph A.3 of Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020, the provisions with respect to fees and charges as specified therein, shall not be applicable to Co-investment services. The provisions of the aforesaid paragraph A.3 shall remain unchanged for portfolio management services other than Co-investment.

The rules regarding fees and charges as provided in the mentioned Circular shall not extend to Co-investment services.

4

Direct on-boarding of clients by Portfolio Managers

In partial modification to paragraph B of Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020, the provisions with respect to direct on-boarding of clients by Portfolio Managers as specified therein, shall not be applicable to Co-investment services. The provisions of the aforesaid paragraph B shall remain unchanged for portfolio management services other than Co-investment.

The rules regarding direct on-boarding of clients by Portfolio Managers as provided in the mentioned Circular shall not extend to Co-investment services.