Responsibilities of a Portfolio Manager (PMS)
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- A Portfolio Manager manages client funds on an individual basis, aligned with each client’s financial objectives
- PMS investments must generally comply with the minimum investment requirement of ₹50 lakh, subject to exceptions for accredited investors
- Portfolio Managers act as fiduciaries and must prioritize client interests at all times
- Strict safeguards ensure segregation of client funds, securities, and operational transparency
- Portfolio Managers are responsible for maintaining separate accounts and preventing commingling of client assets
- Regulations prohibit misuse, borrowing, or unauthorized lending of client funds or securities
- Prompt grievance redressal and ethical conduct are core responsibilities
- Compliance with SEBI regulations and distributor certification requirements ensures investor protection and governance integrity
A Portfolio Manager is responsible for managing each client’s funds individually and tailoring investment decisions to the client’s specific objectives and financial needs.
Minimum Investment Requirement in PMS
They must ensure that a client does not invest less than ₹50 lakh, except in the case of accredited investors or co-investment portfolio managers where this requirement does not apply. As fiduciaries, Portfolio Managers are obligated to act solely in the best interests of their clients while maintaining complete separation of each client’s securities and funds. All client money must be held in a separate account with a Scheduled Commercial Bank, and trading activities must always remain within the limits and guidelines established by the client.
Restrictions on Use of Client Funds and Securities
Portfolio Managers are prohibited from deriving any direct or indirect benefit from a client’s funds or securities, and they cannot borrow funds or securities on behalf of their clients. They must also refrain from lending client securities to third parties except where explicitly permitted by regulations. Addressing client complaints promptly and taking swift corrective action is a critical part of their responsibilities.
Compliance Responsibilities of Portfolio Managers
Additionally, Portfolio Managers must ensure that all individuals or entities distributing their services follow applicable regulations and hold the required certifications, such as valid NISM XXIA accreditation.
Blog Disclaimer:
The information herein is meant only for general reading purposes, and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data, and other sources believed to be reliable. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision.
The information herein is meant only for general reading purposes, and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data, and other sources believed to be reliable. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision.
Investment Disclaimer:
Investments in securities are subject to market risks and there can be no assurance or guarantee that the objectives of the Product will be achieved
Investments in securities are subject to market risks and there can be no assurance or guarantee that the objectives of the Product will be achieved
FAQs
A Portfolio Manager in India must meet the eligibility criteria prescribed by SEBI, including relevant professional qualifications, experience, and regulatory compliance requirements. The entity offering PMS services must also be registered with SEBI.
A Portfolio Manager typically makes investment decisions based on the client’s risk profile, financial goals, investment horizon, and agreed mandate. These decisions are supported by research, market analysis, and portfolio strategy.
Yes, clients can generally review the performance of their PMS portfolio through periodic reports, account statements, and other disclosures provided by the Portfolio Manager, as per applicable regulations
A Portfolio Manager manages investments on an individual client basis under a customised mandate, whereas a Mutual Fund Manager manages pooled money across a common investment objective for multiple investors.
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