Portfolio Management Services (PMS) in India: Types, and Organizational Structure

Introduction

• Portfolio managers are registered and regulated under SEBI (Portfolio Managers) Regulations, 2020.

• PMS can be offered only by SEBI Registered Entities.

• January 1993 marked the beginning of PMS, when SEBI issued SEBI (Portfolio Managers) Regulations, 1993.

PMS in India

Types of PMS

Following are the types of PMS by different criteria.

By Provider	​By Asset Class	By Service Provided
PMS by Brokerage	Equity Based PMS	Discretionary Services
PMS by AMCs	Fixed Income Based PMS	Non-Discretionary Services
PMS by Boutique (Independent) Houses	Commodity Based PMS	Advisory Services
	Mutual Fund Based PMS
	Multi Asset Based PMS

• Discretionary Services : Portfolio Manger is free to manager the funds of each investor as per the contract.

• Non-Discretionary Services : The portfolio manager has to consult the client for each transaction.

• Advisory Services : The portfolio manager suggests the investment ideas or provides non-binding investment advice. The investor takes the decision and executes the transaction.

Organizational Structure of PMS in India

• A portfolio manager is a body corporate. Body corporate broadly means a corporate entity which has a legal existence.

• The term body corporate is defined in Section 2(11) of the Companies Act, 2013.

• Body corporate includes a private company, public company, one persona company, small company, LLP, foreign company, but not a co-operative society or not being a company as defined in Companies Act 2013.