Portfolio = Total holdings of securities belonging to any person

Portfolio management has been acknowledged by the project management community as the coordinated
management of portfolio components to achieve specific organizational objectives. It is a technique for
optimizing the organizational returns from project investments by improving the alignment of projects
with strategy and ensuring resource sufficiency. It aims to optimize the outcomes from project investment
across a portfolio and it is also regarded as the governance method for selection and prioritization of
projects or programs. Organizations that do not align their project portfolio with organizational strategies
and governance will tend to increase the risks of running projects that are low priority initiatives. As a
result, there will be critical resource shortages, and investments will not be optimised. Therefore,
application of the techniques of portfolio management within the context of organizational governance
provides reasonable assurance that the organizational strategy can be achieved.

A portfolio manager is any person who pursuant to a contract or arrangement with a client, advises or
directs or undertakes on behalf of the client the management or administration of portfolio of securities
or the funds of the client, as the case may b e. The PM Regulations regulate separately managed accounts
in India. Under the PM Regulations, the portfolio manager advises, directs or undertakes on behalf of its
client the management or administration of a portfolio of securities or the funds of the client pursuant to
a contract or arrangement with the client and the underlying assets are held by the clients directly.
Portfolio management services under the PMS regulations can be discretionary (where the portfolio
manager has the discretion to make investments) and non-discretionary (where the discretion lies with the
clients). FPIs registered under the FPI Regulations may also avail themselves of the services of a portfolio
manager

List of Compliances

 Regulation 3 states that a certificate of registration is to be granted by SEBI to any person who
wishes to serve as a portfolio manager.
 Regulation 6 states that while considering the grant of certificate of registration to the applicant,
the Board shall take into account all matters which it deems relevant to the activities relating to
portfolio management such as whether
(a) the applicant is a body corporate;
(b) the applicant has the necessary infrastructure like adequate office space, equipments and the
manpower to effectively discharge the activities of a portfolio manager;
(c) the principal officer of the applicant has either - (i) a professional qualification in finance, law,
accountancy or business management from a university or an institution recognised by the
Central Government or any State Government or a foreign university; or (ii) an experience of at
 least ten years in related activities in the securities market including in a portfolio manager, stock
broker or as a fund manager; (iii) a CFA charter from the CFA Institute. (Chartered Financial
Analyst)
(d) the applicant has in its employment minimum of two persons who, between them, have atleast
five years of experience in related activities in portfolio management or stock broking or
investment management or in the areas related to fund management;
(e) any previous application for grant of certificate made by any person directly or indirectly
connected with the applicant has been rejected by the Board;
(f) any disciplinary action has been taken by the Board against a person directly or indirectly
connected with the applicant under the Act or the Rules or the Regulations made thereunder;
[“person directly or indirectly connected" refers to any person being an associate, subsidiary, inter connected
company or a company under the same management within the meaning of section 370(1B) of the Companies Act,
1956 or in the same group]
(g) the applicant fulfils the capital adequacy requirements specified in Regulation 7 (capital adequacy
requirements shall not be less than the networth of two crores, and if granted registration before
commencement of these Regulations, they are mandated to raise the networth to not less than
one crore in six months, and to two crores six months thereafter;
(h) the applicant, its director, principal officer or the employee as specified in clause (d) is involved in
any litigation connected with the securities market which has an adverse bearing on the business
of the applicant;
(i) the applicant, its director, principal officer or the employee as specified in clause (d) has at any
time been convicted for any offence involving moral turpitude or has been found guilty of any
economic offence;
(j) the applicant is a fit and proper person; [also defined in Schedule II of SEBI (Intermediaries) Regulations,
2008 as a person with (a) integrity, reputation and character; (b) absence of convictions and restraint orders; and
(c) competence including financial solvency and networth.]
(k) grant of certificate to the applicant is in the interests of investors.
 In cases where registration is not granted, refusal to grant registration shall be communicated by
the Board within thirty days of such refusal to the applicant, stating therein the grounds on which
the application has been rejected. The aggrieved applicant may apply to the Board for
reconsideration of its decision within 30 days from the date of receipt of such intimation.

 As given in Schedule II of the Regulations, along with the application, a non-refundable payment
of Rupees One Lakh is to be made.
 At the time of grant of certificate, Ten Lakh Rupees is payable as registration fees.
  To keep the registration in force, the portfolio manager is required to pay a fee of Five Lakh
Rupees every three years from the date of grant of certificate within three months before expiry
of the block period for which fee has been paid.
 Failure to make the requisite payments may lead to suspension of certificate by the Board,
whereupon the portfolio manager shall forthwith cease to carry on the activity as a portfolio
manager for the period during which the suspension subsists.1

Any registration granted is subject to the following conditions, under Regulation 9A:

(a) where the portfolio manager proposes to change its status or constitution, it shall obtain prior
approval of the Board for continuing to act as such after the change;

(b) it shall pay the fees for registration in the manner provided in these regulations;

(c) it shall take adequate steps for redressal of grievances of the investors within one month of the
date of the receipt of the complaint and keep the Board informed about the number, nature and
other particulars of the complaints received;

(d) it shall maintain capital adequacy requirements specified in regulation 7 at all times during the
period of the certificate

(e) it shall abide by the regulations made under the Act in respect of the activities carried on by it as
portfolio manager.

(2) Nothing contained in clause (a) of sub-regulation (1) shall affect the obligation to obtain a fresh
registration under section 12 of the Act in cases where it is applicable.

1 Regulation 12, SEBI (Portfolio Managers) Regulations, 1993.