Kolkata: The Securities & Exchange Board of India (Sebi) is considering allowing exchange-traded derivatives to be a part of portfolio management services (PMS), according to executive director R K Nair.
"We are looking at derivatives to be allowed as part of PMS. But we are yet to take a decision. As of October 31, 2009, there were 247 portfolio management managers registered with Sebi with 57,134 clients. The total amount of assets under management was Rs 2,71,448 crore."
Nair was in Kolkata for a seminar on PMS organised by the Indian Chamber of Commerce.A report by the consultancy firm Celent says India is set to become a huge hunting ground for wealth managers, with the number of potential clients and the size of manageable wealth expected to grow four times through 2012.
The study estimates Indians will have $1 trillion (about Rs 47 lakh crore) worth of investable wealth by 2012. The wealth management market will have a target size of 42 million households against 13 million in 2007, the report said.
On whether Sebi could allow more products and increase the minimum amount for PMS from the present Rs 5 lakh, Nair said, "Lots of wealthy people are channelling a lot of money into various instruments. But, as a regulator, we are clued on to any kind of systemic issues, be it a failure of a hedge fund or a private equity fund. We will look into new products, but we are conservative of structured products. As far as raising the limit is concerned, we are not thinking of it immediately."
Nair said portfolio managers should not come up with schemes like a mutual fund. "Recently, Sebi considered an amendment to make changes in the capital adequacy ratios of portfolio managers. According to the modified regulation, the net worth of PMS has been raised from Rs 50 lakh to Rs 2 crore."
Nair added that Sebi, through its regional offices, has been driving education on financial awareness through various platforms such as schools and NGOs.


