“Streamlining Digital Onboarding SEBI: SEBI’s Revised Guidelines for Portfolio Managers”

The Securities and Exchange Board of India (SEBI) has relaxed the digital onboarding process for portfolio managers’ clients to make doing business easier.

Portfolio managers must now ensure that new clients use a typed or electronically written note to confirm that they understand the fee structure.

This replaces the previous practice of clients writing the note by hand. This change, effective from October 1, aims to make digital onboarding simpler.

SEBI observed that the requirement of a handwritten note on the annexure of fees in the agreements was creating challenges, including non-availability of a stylus at the investors’ location.

The industry body Association of Portfolio Managers in India (APMI) will specify the standard procedure for onboarding clients through digital mode in consultation with SEBI.

Portfolio managers must provide an annexure detailing the fee calculation and a ‘Most Important Terms and Conditions’ document for clients to acknowledge. Also, SEBI made registration with APMI mandatory for PMS distributors to promote collective oversight.