Setting standards

New guidelines will increase transparency in PMS

In a recent circular, the Securities and Exchange Board of India (Sebi) has set tighter definitions and guidelines for performance benchmarking and investment approach for the portfolio management services (PMS) segment. The new guidelines, which will come into force in April next year, would give investors a clearer picture of what strategy a PMS is targeting, and also a clearer idea of returns with detailed comparisons and timeliness. The investment approach (IA) is the documented philosophy adopted by a given portfolio manager. Now this IA is to be fleshed out by disclosure of an additional broad layer of strategy, defined