Streamlined Transfers: SEBI's New Rules for Portfolio Management Services

The Securities and Exchange Board of India (SEBI) has taken a significant step towards enhancing business efficiency by introducing a streamlined procedure for transferring Portfolio Management Services (PMS) businesses. The regulator's new framework allows for the transfer of PMS business from one portfolio manager to another with SEBI's prior approval.

In its circular, SEBI outlines distinct procedures based on the relationship between the involved portfolio managers. Transfers within the same group can either involve select Investment Approaches or the entire PMS business, while different group managers must transfer the entire business. SEBI mandates compliance with regulatory stipulations for all such transfers.

The transferee manager will assume responsibility for all operations, pending actions, and obligations from the transferor. The process must be completed within two months following SEBI's approval, during which time the outgoing manager is barred from taking on new clients. A completion of formalities requires transferring managers to surrender their registration certificates.