Portfolio Management Services limits hiked to Rs 25 lakh; SEBI

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PMS limits hiked to Rs 25 lakh; SEBI
The market regulator, Securities and Exchange Board of India on Saturday hiked the minimum investment in Portfolio Management Services (PMS) to Rs 25 lakh, whereas it was Rs 5 lakh earlier. This new amendment is applicable to new clients and for fresh investments by existing clients.

This services is offered by many brokerages and independent managers. PMS is managed by professionals, these portfolio managers with the mixture of talent and experience build tailor made portfolio for their clients keeping risk appetite in mind.

The SEBI Board met on 28 Jan and took few other decisions:

Convertible Debt Securities in Rights/Bonus Issues
Regarding this SEBI said, “It has been decided to clarify that reservation shall be available only to compulsorily convertible debt holders, since conversion in such cases is not at the option of the holders of these instruments”.

It has been decided to exempt Insurance Companies and Mutual Funds which are broad based investment vehicles representing the interests of the public at large from the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations relating to sale and lock-in of their pre-preferential shareholding in the issuer company, it further added.

Preferential Allotment to Insurance Companies and Mutual Funds
SEBI easing preferential allotment norms for insurance companies and mutual funds said, “Presently, SEBI (ICDR) Regulations preclude companies from issuing preferential allotment to entities who have sold any of their holdings during the six month period prior to relevant date. Further, allottees in preferential allotment are required to lock-in their entire pre-preferential holdings for a period of six months from date of preferential allotment. The lock-in on shares allotted in preferential issue per se, however, would remain unchanged.”

Advertisement Code
To provide flexibility to Asset Management Companies (AMCs) in issuing true and fair advertisements with meaningful disclosure to investors, Advertisement Code shall be amended and made principle based as far as possible.

“AMCs will be responsible for the accuracy, truthfulness, fairness of the advertisement,” Sebi said.

Investment Valuation Norms
SEBI amended Investment Valuation Norms and said, “AMC (asset management companies) shall ensure fair treatment to all investors, that is, to existing investors as well as to investors seeking to purchase or redeem units of mutual funds at all point of time in all schemes.”

Further adding, “In case, debt and money market securities are not traded on a particular valuation day, then valuation through amortisation basis shall be restricted to securities having residual maturity of up to 60 days (at present 91 days), provided such valuation shall be reflective of the realisable value/ fair value of the securities.”


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