SEBI Allows Transfer of PMS Business Between Portfolio Managers
Why in the news
SEBI issued a circular allowing Portfolio Management Services (PMS) businesses to move from one portfolio manager to another once regulators approve. The aim is flexibility, uninterrupted client service and easier consolidation.
Transfer rules
| Type | What is allowed | Conditions |
|---|---|---|
| Intra-group | Select investment approaches or the whole business | Full transfer: surrender the transferor’s registration certificate within 45 days of completion |
| Inter-group | Entire business only; no partial transfer | Joint application to SEBI |
- Prior SEBI approval is needed in every case.
- The transferee must meet all regulatory requirements and takes over pending actions, litigation and obligations of the transferor.
- A written undertaking on this must go to SEBI.
Objectives
- Enable consolidation for scale and efficiency.
- Keep investor services continuous during a change of management.
- Bring clarity and accountability, and support ease of doing business.
About PMS
- Investment management by SEBI-registered portfolio managers for a fee, in equity, debt or hybrid portfolios, tailored to client goals.
- Minimum investment: ₹50 lakh.
- Types: Discretionary (manager decides), Non-Discretionary (client consent), Advisory (manager advises, investor executes).
Exam angle
- Surrender period: 45 days.
- Minimum PMS ticket: ₹50 lakh.