Sebi makes mandatory registration of PMS providers with industry body APMI

Markets regulator Sebi on Thursday decided to promote collective oversight of PMS distributors by making registration with the Association of Portfolio Managers in India (APMI) mandatory for them.

The move is aimed at promoting ease of doing business initiatives for portfolio managers.

The new directive would come into effect from January 1, 2025, and APMI would issue the criteria for registration of distributors by July 1, this year, Sebi said in a circular.

"In order to facilitate collective oversight of PMS (Portfolio Manager Services) distributors at the industry level, it has been decided that any person or entity involved in the distribution of portfolio management services shall obtain registration with APMI," Sebi said.

Portfolio Managers have been asked to ensure that any person or entity engaged in the distribution of its services has obtained registration with APMI, in accordance with the criteria laid down by APMI.

This is in line with the practice already being followed in the mutual fund industry, wherein, mutual funds distributors are required to register with the Association of Mutual Funds in India (AMFI) and obtain an ARN (AMFI Registration Number) for providing distribution services.
 

Currently, persons engaged by a portfolio manager to act as a distributor of the PMS are required to obtain certification from the National Institute of Securities Markets (NISM).

Further, portfolio managers are required to ensure that distributors abide by the Code of Conduct specified under portfolio managers' rules.

The mandatory registration with APMI would help in providing single filing for compliance and other declarations for PMS distributors, provide access to industry data, offer easy as well as faster access to portfolio managers, and faster grievance redressal.

This came after a Sebi-constituted working group reviewed the present regulatory framework under Portfolio Managers Regulations and recommended measures to promote ease of doing business. This group was formed to simplify and ease compliance.

Last year, APMI introduced a distributor registration portal through which individuals can obtain APMI Registration Number (APRN) to sell PMS. The registration was voluntary for existing PMS distributors.

Additionally, the Securities and Exchange Board of India (Sebi) suggested facilitating ease in the digital onboarding process for clients of portfolio managers.