SEBI Circular for Portfolio Managers – 30th September, 2022

SEBI vide its circular dated 30 th September, 2022 asked Portfolio Managers to put in place a written down policy (“policy”), in compliance with the PMS Regulations and circulars issued thereunder, which inter-alia detail the specific activities, role and responsibilities of various teams engaged in fund management, dealing, compliance, risk management, back-office, etc., with regard to management of client funds and securities including the order placement, execution of order, trade allocation amongst clients and other related matters.

Portfolio Managers shall also put in place a specific policy, in compliance with the PMS Regulations and circulars issued thereunder, which shall inter-alia provide for the following: Specific situations (not generic) wherein the orders shall be placed for each client individually or pooled from trading account of Portfolio Manager. Scenarios / situations in which deviation from the allotment of securities as intended at the time of placement of order would be permissible, if at all. Scenarios, wherein, the Portfolio Manager is required to place certain margins / collaterals in order to execute certain transactions, details on how such margins / collaterals shall be segregated / placed from amongst various clients, without affecting the interest of any client. Deviations, if any, shall be on account of exigency only and require prior written approval of the Principal Officer and Compliance officer of the Portfolio Manager with a detailed rationale for such deviation. The aforesaid policies as mentioned shall be approved by the Board / equivalent body of the Portfolio Manager.

4. Portfolio Managers shall ensure that all clients are treated in a fair and equitable manner and ensure compliance with the following: 4.1. Requirements with respect to investments in all instruments: a) Portfolio Managers shall constitute a dealing team (DT) which shall be responsible for order placement and execution of all orders in accordance with the aforesaid policies of the Portfolio Manager. DT may include the Principal Officer or the person appointed in terms of Regulation 7(2) (e) of PMS Regulations. b) Portfolio Managers shall ensure that DT is suitably staffed and comply with the following: All conversations of DT shall be only through the dedicated recorded telephone lines or through emails from authorized email ids. Mobile phones or any other communication devices other than the recorded telephone lines shall not be