TMI BlogCircular for Portfolio ManagersX X X X Extracts X X X X X X X X Extracts X X X X ..... hall ensure compliance with the prudential limits on investment as may be specified by the Board. Accordingly, the Portfolio Managers shall ensure the following: i. Portfolio Manager shall invest up to a maximum of 30 percent of their client s portfolio (as a percentage of the client s assets under management) in the securities of their own associates/related parties. Further, the Portfolio Manager shall ensure compliance with the following limits: Security Limit for investment in single associate/related party (as percentage of client s AUM) Limit for investment across multiple associates/related parties (as percentage of client s AUM) Equity 15% 25% Debt and hybrid securities 15% 25% Equity + Debt + Hybrid securities 30% ii. The aforementioned limits shall be applicable only to direct investments by Portfolio Managers in equity and debt/hybrid securities of their own associates/related parties and not to any inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Portfolio Managers can be made only after obtaining consent from the client. vii. In the event of passive breach of the specified investment limits, (i.e., occurrence of instances not arising out of omission and/or commission of portfolio manager), a rebalancing of the portfolio shall be completed by Portfolio Managers within a period of 90 days from the date of such breach. Notwithstanding the same, the client may give an informed, prior positive consent to the Portfolio Manager for waiver from the rebalancing of the portfolio to rectify any passive breach of the investment limits. viii. Such requirement of rebalancing in the event of a passive breach of investment limits shall be suitably disclosed in the consent form mentioned at para 2(B)(i) above and any waiver from the same shall also be obtained in the same document. ix. In accordance with Regulation 27 (1) of the PMS Regulations , Portfolio Managers shall maintain records and documents pertaining to: a) Prior positive consent or dissent, as the case may be. b) Instances of the passive breach of investment limits, if any. c) Steps taken, if any to rectify the passive breach of inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed parties of Portfolio Manager: i. Transaction wise Sr. No. Issuer name Type of security ISIN Transaction wise Details Transaction date Buy/sell Quantity Gross transaction value (INR in crores) Net transaction value (INR in crores) ii. Security wise Sr. No. Issuer name Type of security ISIN Security wise Details Investment amount (cost of investment) as on last day of the previous quarter (INR in crores) Value of investments as on last day of the previous quarter (INR in crores) percentage of client s AUM as on last day of the previous quarter (INR in crores) percentage of PM s AUM as on las ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (1A), 22(4) (da) (db) , 24 (3A) to 3(E) of PMS Regulations shall not be applicable for advisory portfolio management services, co-investment portfolio management services and for client categories who in turn manage funds under government mandates and/or are governed under specific Acts of State and/or Parliament. b) Notwithstanding the above, for advisory portfolio management services, Portfolio Managers shall make suitable disclosure to the client regarding conflict of interest with respect to investments in the securities of the associates/related parties, while giving advice. The term associate for this purpose shall have the same meaning as defined under explanation to Regulation 24 (3C) of PMS Regulations. Further, Portfolio Managers shall disclose the credit rating of all securities, while giving advice. c) The circular shall come into effect from September 20, 2022 and the requirements at para 2(D)(II) above shall come into effect from the quarter ending September 2022. 4. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 43 of the SEBI (Portf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Equity + Debt + Hybrid securities 6. In case of passive breach of investment limits (i.e., occurrence of instances not arising out of omission and/or commission of Portfolio Manager) as decided at para 5 above, a rebalancing of the portfolio is required to be completed by Portfolio Managers within a period of 90 days from the date of such breach. However, the client may give an informed, prior positive consent to the Portfolio Manager for a waiver from the requirement of rebalancing of the portfolio to rectify the passive breach of investment limits. The client may choose not to provide any waiver. 7. Please indicate consent or dissent as under: Limits on investment __Consent: Portfolio Manager ca n invest in the securities of its associates/related parties within the limits agreed upon at para 5 above. __Dissent: Portfolio Manager cannot invest in the securities of its associates/related parties. Waiver from rebalancing of portfolio on passive breach of investment limits __Consent: Portfolio Manager need not rebalance the portfolio on passive breach of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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