New Delhi, Capital markets regulator Sebi on Friday relaxed the digital onboarding process for clients of portfolio managers, a move aimed at providing ease of doing business.
When engaging clients, portfolio managers must ensure that clients use a typed or electronically written note stating that they have understood the fee structure, rather than the current practice which requires clients to write in their own handwriting. Focused on paying fees.
The change will be effective from October 1 with an aim to ease digital onboarding, the Securities and Exchange Board of India (SEBI) said in the circular.
The move came after SEBI observed certain operational challenges in complying with the requirement of handwritten note on contract of fees in agreements including non-availability of stylus at the investors' location. This requirement was hindering customers towards full digital onboarding.“While on-boarding the client, the Portfolio Manager will ensure that the new client has signed the fees and charges separately and adds a note that if the client has joined physically he has signed the fees and charges in handwritten form. mode and typed using the keyboard or written electronically using fingers/stylus pen, if the customer is on-board through digital mode,'' SEBI said.
Also, the regulator said the standard procedure for onboarding clients through digital mode will be specified by industry body Association o Portfolio Managers in India (APMI) in consultation with the market regulator.
SEBI said portfolio managers will have to provide a contract detailing fee calculations.
To facilitate understanding of important aspects of the portfolio manager-client relationship, SEBI asked the portfolio manager to provide the 'Most Important Terms and Conditions' document to its client, which should be duly accepted by the client.SEBI on Thursday decided to boost collective surveillance of PMS (Portfolio Management Services) distributors by making registration with APMI mandatory.
When engaging clients, portfolio managers must ensure that clients use a typed or electronically written note stating that they have understood the fee structure, rather than the current practice which requires clients to write in their own handwriting. Focused on paying fees.
The change will be effective from October 1 with an aim to ease digital onboarding, the Securities and Exchange Board of India (SEBI) said in the circular.
The move came after SEBI observed certain operational challenges in complying with the requirement of handwritten note on contract of fees in agreements including non-availability of stylus at the investors' location. This requirement was hindering customers towards full digital onboarding.“While on-boarding the client, the Portfolio Manager will ensure that the new client has signed the fees and charges separately and adds a note that if the client has joined physically he has signed the fees and charges in handwritten form. mode and typed using the keyboard or written electronically using fingers/stylus pen, if the customer is on-board through digital mode,'' SEBI said.
Also, the regulator said the standard procedure for onboarding clients through digital mode will be specified by industry body Association o Portfolio Managers in India (APMI) in consultation with the market regulator.
SEBI said portfolio managers will have to provide a contract detailing fee calculations.
To facilitate understanding of important aspects of the portfolio manager-client relationship, SEBI asked the portfolio manager to provide the 'Most Important Terms and Conditions' document to its client, which should be duly accepted by the client.SEBI on Thursday decided to boost collective surveillance of PMS (Portfolio Management Services) distributors by making registration with APMI mandatory.
