Mumbai, February 23 The capital markets regulator, Sebi, will be conducting a review of the regulations governing portfolio management services (PMS), Chairman Tuhin Kanta Pandey said on Monday.
"We propose to carry out a comprehensive review of the SEBI (Portfolio Managers) Regulations, 2020, so that the framework remains effective, adaptable, and aligned with evolving market dynamics," Pandey said, speaking at an event held at the National Institute of Securities Market near here.
Speaking with reporters on the sidelines, Pandey said the review will follow similar efforts undertaken on the listing obligations and disclosure requirements and mutual funds front.
Certain aspects of the six-year-old regulations need to be rationalized, Pandey said, adding that Sebi will follow the usual process of coming out with a consultative paper before posting the draft regulations for public comments.
He declined to answer a specific question on whether the Sebi is considering reviewing the investment sizes for PMS, given that it has created a new category of SIF or specialized investment funds which is in-between mutual funds and PMS.
Meanwhile, Pandey said that Sebi has received representations from stock brokers regarding the challenges they face after a review of lending guidelines carried out by the RBI, and added that it will be taking up the matter with the central bank.
He, however, declined to specify the exact stance that the capital markets regulator will be taking, pointing out that there are three-four challenges which the brokers have highlighted.
It may be noted that starting April 1, the RBI has proposed to disallow banks from lending for proprietary trading and also insist on 100 per cent collateral for bulk of other bank funding to brokers.
"Since the representation (from brokers) has also come to us, we will have a look at it," he said.
Sebi is working with concerned ministries in the government to review the ban on futures trading in agricultural commodities, Pandey said.
He said the regulator has begun to use artificial intelligence-based tools for its surveillance measures, pointing out that it is deployed to monitor influencers and to check whether the lines on investment advice are not breached.
Reacting to reports of the suspension of a general manager-rank official over vigilance flags, the Sebi chief virtually confirmed the action, saying an "initial action" has been taken after finding out egregious lapses.