SEBI Portfolio Management Services (PMS) Registration & Compliance — Forms A & B

SEBI (Portfolio Managers) Regulations, 2020: primary regulation governing PMS entities; replaced the SEBI (Portfolio Managers) Regulations, 1993 and 2012. Regulation 3: registration requirement — no person shall act as portfolio manager without a SEBI Certificate of Registration. Regulation 8: application for registration in Form A; eligibility criteria — body corporate, minimum net worth Rs. 5 crore, at least one NISM Series-PMS certified principal officer. Regulation 14: net worth requirement — minimum Rs. 5 crore; CA net worth certificate to accompany registration application and annual filing. Regulation 22: Form B — client agreement; mandatory disclosures including fees, conflicts of interest, investment approach. Regulation 24: annual audit by a Chartered Accountant; audit report to be filed with SEBI within 60 days of financial year end. Regulation 25: quarterly report to SEBI within 15 days of quarter end. NISM Series-PMS (Portfolio Management Services) Examination: mandatory for principal officer.

Portfolio Management Services (PMS) in India are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Portfolio Managers) Regulations, 2020, which replaced the earlier 2012 Regulations. A Portfolio Manager is a body corporate that, pursuant to a contract with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client. Before commencing PMS operations, every portfolio manager must obtain a Certificate of Registration from SEBI.

The eligibility criteria for SEBI PMS registration include: the applicant must be a body corporate (company or LLP); it must have a minimum net worth of Rs. 5 crore (increased from Rs. 2 crore under the 2020 Regulations); at least one principal officer with the required NISM Series-PMS certification; and an appointed compliance officer. The application is made in Form A under Regulation 8 of the SEBI (Portfolio Managers) Regulations, 2020, accompanied by the required disclosures and certificates.

Post-registration compliance obligations for PMS entities are ongoing and material: Form B (agreement with client) must comply with the disclosure requirements of the 2020 Regulations; a quarterly report must be submitted to SEBI within 15 days of each quarter end (January 15, April 15, July 15, October 15); an annual report must be filed within 60 days of the financial year end; the net worth must be maintained at Rs. 5 crore at all times and a net worth certificate from a Chartered Accountant must be submitted annually; the audit report under Regulation 24 must be filed within 60 days of the financial year end; and any change in material information must be reported to SEBI within 30 days.

A Chartered Accountant's role in PMS registration and compliance is critical and multi-faceted. The CA provides: the net worth certificate (initial and annual) computed as per SEBI's prescribed format (shareholders' equity less intangible assets and accumulated losses); the audited financial statements that form part of the SEBI application and annual filings; the audit report under Regulation 24 on the PMS entity's compliance with the Regulations; and tax advisory on fee structures, performance fees, GST on investment management services, and pass-through tax certificates for clients. Our service covers the complete PMS registration and ongoing compliance lifecycle.