February, 2020)

1. SEBI based on the recommendations of a Working Group and inputs from public consultation, reviewed

the framework for regulation of Portfolio Managers and the SEBI (Portfolio Managers) Regulations,

2020(“PMS Regulations”)has been notified on January 16, 2020.

2. In addition to the above, certain changes to the regulatory framework for Portfolio Managers have been

mandated, as under:

3. In partial modification to Cir. /IMD/DF/13/2010 dated October 05, 2010 on Regulation of Fees and

Charges, the following is mandated:

(i) As provided in Regulation 22 (11)of the PMS Regulations, no upfront fees shall be

charged by the Portfolio Managers, either directly or indirectly, to the clients.

(ii) Brokerage at actuals shall be charged to clients as expense.

(iii) Operating expenses excluding brokerage, over and above the fees charged for Portfolio

Management Service, shall not exceed 0.50% per annum of the client’s average daily

Assets under Management (AUM).

(iv) In case client portfolio is redeemed in part or full, the exit load chargedshall be as under:

a) In the first year of investment, maximum of 3%of the amount redeemed.

b) In the second year of investment, maximum of 2%of the amount redeemed.

c) In the third year of investment, maximum of 1%oftheamount redeemed.

d)After a period of three years from the date of investment, no exit load.

4. The Circular further elaborates on Periodic reporting by Portfolio Managers, uniformity of investment

approaches, Direct on-boarding of clients by Portfolio Managers, Reporting of Performance by Portfolio

Managers, Reporting of Performance by Portfolio Managers, etc.

5. The provisions of this Circular shall be applicable with effect from May 01, 2020.

The Circular is available at: https://www.sebi.gov.in/…/guidelines-for…