An investor association has asked for better information to be provided on the performance of portfolio management services (PMS) providers, shortly after the regulator tweaked regulations governing the segment.
The PMS industry largely caters to rich investors who can allocate large amounts to such schemes, and are typically seen to carry more risk than mutual funds. A discretionary portfolio manager manages the assets directly. Non-discretionary portfolio management involves acting on the directions of the client.
There is limited information on the schemes and how they have fared, unlike mutual funds, which declare a daily update on performance.
“Unfortunately, this data is not available in a form and manner, either on…(the)…Sebi website or the Portfolio Managers’ website, which is usable and easily discernable by an investor or public,” said the letter written by Midas Touch Investors Association to Sebi, a copy of which is with Business Standard.
It has also asked for additional action on the issue of vanishing companies. The association states that there are at least 752 companies that raised money from investors but can no longer be traced.
There have been efforts to identify vanishing companies, and a list is available. Strong action to redress investor grievances in such companies hasn’t been forthcoming despite the list, according to Virendra Jain, founder of Midas Touch Investors Association.
“They did not do anything on that,” he said.
It has requested action to ‘recover money and assets of 752 Vanishing Companies and their promoters and directors within a defined time-frame.’
It has also suggested that actions on raising networth and ticket-size for PMS providers could have been handled differently as it could have the effect of constricting the market.
The stock market regulator has recently decided in its November 20 board meeting that the net worth for portfolio management services should be increased from two crore rupees to five crore rupees. The minimum investment size was also increased from Rs 25 lakh rupees to Rs 50 lakh rupees. It also made changes such as requiring discretionary portfolio managers to invest only in listed securities, money market securities, and other specified instruments. Non-discretionary or advisory portfolio managers are not to invest more than a quarter of assets in unlisted securities. Custodians too have been made mandatory for all providing such services, except those providing advisory services.
A portfolio manager said that there is a lack of uniformity in the way that PMS providers make the data available. Some provide only a model portfolio’s returns, others of only certain investors and so on.
The recent report of the working group PMS regulations had proposed standardisation of performance disclosures.
An email sent to Sebi did not immediately receive a reply.
No comments:
Post a Comment