Stocks Investing
Portfolio Management Services:
Many of us do not have any idea what a Port Folio Management Services is. Some people use their minds a lot for earning more income from business, but inturn would not be having much idea how to make use of their valuable income. PMS or the Portfolio Management Services is one of the growing field where people could invest and earn in a very short period just by sitting at home.
Person who has a wish to invest in stocks Markets can choose PMS. The clients / investors need to choose a Portfolio Manager, fill in the Application forms and need to initially give a minimum of Rs.500000/- (as per SEBI Rules) as Corpus. This is all they need to do to earn income from stock markets.
Portfolio Managers:
They are the professionals who have knowledge in depth of the stocks markets, who take care of the investments made by the clients, make market research and invest the clients corpus in the profitable markets.
Benefits to the Clients / Investors in PMS:
Investors have No Market tension or do tedious market research towards finding out the shares which is profitable, which is less risky which would earn them other benefits like dividends, bonus shares etc.They can just sit back at home and earn from their investments just relying on the Portfolio managers who charge a very less fees for their valuable servcies rendered to the investors.
Operations:
Step 1 : To Approach a PORTFOLIO MANAGER
The investors first step is to approach a Portfolio Manager.
Step 2 : Fill in the forms
Forms that is to be filled in while opening a PMS Account are as follows -
a) Portfolio Application form
b) Bank Account Application form
c) Broker Application form
d) Demat Application form
Step 3: Accounts to be opened by Managers
All the above said accounts are opened by the Portfolio Managers themselves
Step 4: Start Operating the Portfolio Management Services.
After all the accounts are opened the PMS Transactions gets started.
Brief Description of the Accounts Opened and Their Purposes:
1.Portfolio Application Form : It is the form need to be filled by the investor along with the PMS agreement to issue a Power of Attorney to the Portfolio Manager to operate on behalf of the former.
2.Bank Account Application form: Every transaction is routed through Bank Accounts. All the purchase and Sale proceeds are transferred through these bank accounts.
3.Broker Application form: These form is filled in order to open a broker account with a Listed Broker for purpose of transacting in shares, that is broker is the person who buy and sell shares which are instructed to be bought and sold by the portfolio Manager on behalf of the investor.
4.Demat Application form: Same as Transactions routed through Bank Accounts, they need to routed through Demat account too. Demat account is where the shares are held in Electonic form. Whenever there is a purchase Shares are credited to the demat account and whenever there is a sale the shares are debited in the demat account. The balance of shares / stocks in hand can be viewed as and when required by just viewing the demat account as the same as the value of shares can be viewed at any time by just looking into the Clients Bank account.
Types of Clients:
Both the Residents and NRI can operate in Portfolio Management Services. All the documents are mailed Physically to the clients place itself for Investors Signature and filling up of forms , thereby no responsibility for the client to come to place of Operation directly, he / she can complete all formalities by just sitting at home.
Information to be Mentioned in the Agreement as per Sebi Rule:
1.The quantum and the manner of payment of fee payable by the client for each activity provided by the portfolio Manager.
2.Portfolio risks
3.Complete disclosure in respect of transactions with related parties as per the accounting standards.
3.Performance of the portfolio manager
4.The contents of the disclosure documents has to be certified by an independant chartered accountant.
Sebi Guidelines Regarding Operations Work:
1.The portfolio manager shall not accept from the client, funds or securities worth less than five lacks rupees.
2.The portfolio manager shall keep the clients funds in a seperate bank account and it should be in the scheduled commercial bank.
3.The portfolio manager shall not derive any direct or indirect beneficiary from the clients funds or securities
4.The portfolio manager shall not borrow funds or securities on behalf of the client.
5.The portfolio manager shall not lend securities held on behalf of the client to a thrid party except as provided under these regulations.
6.The portfolio manager shall ensure proper and timely handling of complaints from his clients and take appropriate action immediately.
Terms of Fees:
The quantum and manner of payment of fees and charges for each activity for which the services are rendered by the portfolio manager directly or indirectly such as management fee, advisory charges, transfer, registration and transaction cost with specific reference to the brokerage cost, custody charges, cost related to communication and miscellaneous expenses etc are to be indicated seperately. The portfolio manager shall take prior permission from the client in this respect.
Reports to be Furnished to the Clients:
1.The portfolio manager shall furnish periodically a report to the client. The value of the portfolio, description of the security, number of securities, value of each security held in the portfolio, Cash balance etc.,Beneficial interest received during the period in respect of interest, dividend, bonus shares etc.
2.The portfolio manager shall also furnish to the client documents and information relating only to the management of the portfolio.
3.Expenses incurred in managing the portfolio of the client.
Maimtenance of Books of Accounts Records Etc..
Every Portfolio Manager shall keep and maintain the following books of accounts, records and documents namely
1.Copy of the Balance sheet at the end of each accounting period
2.Copy of the Profit and Loss account at the end of each accounting period
3.copy of the auditors report on the account for each accounting period
4.a statement of financial position; and
5.Records in support of every investment transaction or recommendation which will indicate the data, facts and opinion leading to that investment decision.
Conclusion:
The above details highlights very clearly how easy it is to go in for PORTFOLIO MANAGEMENT SERVICES with less formalities and more income. Let the valuable income lying idle in the hands of the investors be utlised in a better way by choosing this PMS.
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