PMS distributor registration mandatory with APMI: Sebi

In order to promote collective oversight of distributors for portfolio management services (PMS), market regulator Sebi mandated the registration of these distributors with the Association of Portfolio Managers in India (APMI) on Thursday, May 2. 

Industry body APMI will lay down guidelines for the registration by July 1, 2024, and the new directive will come into effect from January 1, 2025, according to a Sebi circular.  

Portfolio managers have been requested to make sure that, in compliance with APMI's guidelines, any individual or organisation involved in the distribution of its services has registered with APMI.

"In order to simplify and ease compliances, a working group was constituted to review the present regulatory framework under SEBI (Portfolio Managers) Regulations, 2020 and recommend measures to promote ease of doing business. Based on the recommendations of the working group, a public consultation was carried out. Pursuant to the above, in order to facilitate collective oversight of PMS distributors at the industry level, it has been decided that any person or entity involved in the distribution of portfolio management services shall obtain registration with APMI. Portfolio Managers shall ensure that any person or entity engaged in the distribution of its services has obtained registration with APMI, in accordance with the criteria laid down by APMI,"  Sebi stated in the circular. 

This decision was made in line with the existing practices followed in the mutual fund industry, where mutual fund distributors have to register with the Association of Mutual Funds in India (AMFI) and also have to obtain an ARN (AMFI Registration Number) to provide distribution services.

At present, anyone or any entity engaged by a portfolio manager to function as a PMS distributor must get accreditation from the National Institute of Securities Markets (NISM).