Sebi eases e-onboarding for portfolio managers

New Delhi, May 4, 2024

Capital markets regulator Sebi on Friday relaxed the digital onboarding process for clients of portfolio managers, a move aimed at facilitating ease of doing business.

While onboarding clients, portfolio managers will have to ensure that new clients use a typed or electronically written note saying they have understood the fee structure rather than the current practice that focuses on clients giving the same in their own handwriting.

The change, aimed at making digital onboarding easier, would be effective from Oct 1, Sebi said in a circular.

The move came after Sebi observed certain operational challenges in complying with the requirement of a handwritten note on the annexure of fees in the agreements, including the non-availability of a stylus at the location of the investors. This requirement was creating a hindrance towards complete digital onboarding of the clients.

“While onboarding a client, portfolio manager shall ensure that the new client has separately signed the annexure on fees and charges, and added a note that they have understood the structure for fees and charges in handwritten in case the client is onboarded through physical mode and typed using keyboard or written electronically using fingers/a stylus pen, in case the client is onboarded through digital mode,” Sebi said.

The regulator added that the standard procedure for client onboarding through digital mode will be specified by industry body Association of Portfolio Managers in India (Apmi) in consultation with Sebi. Sebi said that portfolio managers will have to provide an annexure detailing the fee calculation.

[The Times of India]