SEBI eases Digital Connection Process for Portfolio Managers Clients

Most individual investors seek advice from experienced advisors before putting their money into the stock market.

Similarly, some individuals choose to entrust their investments to portfolio managers, who oversee and manage the investment portfolios of these investors.

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Many investors across the country benefit from Portfolio Management Services (PMS).

Recently, stock market regulator SEBI simplified the digital connectivity process for clients of portfolio managers, making it easier for them to connect digitally.

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The aim of this measure is to improve business convenience. Portfolio managers should make sure that new clients use typed or electronically written notes during the onboarding process.

They also must ensure that clients understand the fee structure, avoiding the current practice where clients write notes for themselves.

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SEBI announced in a circular that this change, aimed at simplifying digital connections, will take effect from October 1.

SEBI gave this special instruction

SEBI stated that when a portfolio manager adds a new client, they must ensure the client signs the annexure of fees and charges separately.

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For clients joining physically, they should understand the fee structure in handwritten form.

For those joining digitally, they must type it using a keyboard or write it electronically with a stylus pen or fingers.


Moreover, the regulator mentioned that the standardized procedure for bringing on board clients via digital platforms will be established by the Association of Portfolio Managers in India (APMI) in coordination with the market regulator.

SEBI stated that portfolio managers must offer an annexure detailing the calculation of fees.


SEBI has also requested portfolio managers to provide clients with a document containing the ‘Most Important Terms and Conditions’ to help them understand crucial aspects of the portfolio manager-client relationship.

Clients must be duly informed about this. SEBI announced on Thursday that it will encourage collective monitoring of PMS (Portfolio Management Services) distributors by requiring their registration with APMI.

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