COMPANY LAW
| New norms for portfolio managers Wed, 06 Oct 2010 |
| The Hindu New norms for portfolio managers MUMBAI: The Securities and Exchange Board of India on Tuesday streamlined the norms for charging of fees by portfolio managers, a move that will check the practice of levying arbitrarily by them. Under the proposed norms, a portfolio manager, who manages the wealth, will be allowed to charge performance fee on the basis of increase in the value of portfolio. At present, there are no guidelines for levying of fee by portfolio managers and SEBI has been receiving complaints relating to fees and charges levied by portfolio managers. “It has come to the notice of SEBI that the clauses relating to fees and charges in the portfolio manager-client agreement do not always clearly reflect the fees and charges payable by the client and the manner of computation of the same,” regulator said while issuing the guidelines. The new norms for portfolio managers will apply from November 1. As regards the existing customers, the portfolio managers will be required to implement the norms from January 1, 2011. “Henceforth, profit/performance shall be computed on the basis of high watermark principle (the highest level achieved during a period) over the life of the investment, for charging of performance/profit sharing fee,” SEBI regulations said |
Online Poll