PR No.171/2010
Consultative Paper on Regulation of Fees and Charges charged by
Portfolio Managers
SEBI has been receiving complaints from clients relating to fees and charges being levied by portfolio managers. Upon scrutiny of the complaints, 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.
In order to bring about greater uniformity, clarity and transparency with regard to fees and charges, it is proposed to advise portfolio managers to include clauses in the client agreement relating to :-
a. Charging of Performance Fee on High Water Mark Principle
b. Charging of fees and charges on actual amount of clients’ funds under management
c. Maximum Liability of the client
d. Disclosure of fees and charges
e. Dispute Settlement
A copy of the consultative paper is put up on the SEBI website under the heading “Reports for Public Comments”. Comments are invited from the public on the consultative paper. The comments may be sent up to August 09, 2010 by e-mail to manisht@sebi.gov.in.
A hard copy may also be sent at the address given below with the subject line indicating “Comments on proposed policy for Portfolio Managers –Regulation of Fees and Charges” so as to reach the SEBI office latest by August 09, 2010 at the address given below:
The Deputy General Manager
Division of Funds- 1
Investment Management Department
Securities and Exchange Board of India
SEBI Bhavan, Plot No: C – 4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051
Mumbai
July 27, 2010