FAQs

1. WHAT IS PMS?

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager, that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolios, your account may be unique. Investment Management Solutions in PMS, can be provided in the following ways:

  • Discretionary - Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager.
  • Non Discretionary -Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager.
  • Advisory -Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor.

Note: In India majority of PMS providers offer Discretionary Services. We offer Discretionary Portfolio Management Services.

  • PMS gives investors access to an institutional process of money management
  • Provides a customized solution by matching the unique circumstances and objectives of each investor.
  • Wealth creation based on disciplined investment process is the crux of PMS
  • Effective diversification helps reduce portfolio volatility and enhances risk‐adjusted returns over long term
  • PMS gives investor direct ownership of the individual securities in the portfolio
2. Who can offer PMS?

PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services.

3. Who can invest?

The Investment solutions provided by PMS cater to a niche segment of clients. The clients can be Individuals or Institutions entities with high net worth. Ideal for investors who:

  • Looking to invest in asset classes like equity, fixed income, structured products etc
  • Desire personalised investment solutions
  • Desire long‐term wealth creation
  • Appreciate a high level of service
4. Who can sign PMS ?
  • An individual

  • HUF
  • 
Body Corporate
  • 
Non-resident Indian (subject to certain conditions)
5. Where will my funds be invested ?

The funds would be invested in equity shares of the companies listed on the recognized stock exchange of India and in debt securities.

Currently, we are focusing on only equity shares and at times, we may consider sitting on cash or investing in gilt securities/liquid mutual funds for short time in case the right investing opportunities are not available.

We do not engage the funds of the clients in making intra-day trading or trading in future and options.

6. Will the investment be in my name ?

Yes, under PMS, a bank account and demat account are separately opened in your name & all investments are made in your name only. Accordingly, any income accruing out of the investment made will also be credited in your bank account and the shares will be held in the Dmat account in your name.  As per the PMS agreement, the Power of Attoreny for operating the bank and dmat account will be with the portfolio manager.



7. Can I introduce my current portfolio of investments ? What is the minimum size of investments ?



Yes, it is not necessary to introduce fresh funds, existing portfolio with market value more than Rs.25 lakhs can be introduced as investment.  Also fresh funds of Rs.25 lakhs or more in your newly opened bank account can be considered as a valid portfolio.  As per SEBI guidelines, minimum size of the portfolio of a client has to be Rs.25 Lakhs.



8. Will I have any control over my portfolio ?
 



Under discretionary portfolio management services, the investor can mention specific needs (sector restrictions) which the fund manager will keep in mind while investing your funds.  However, the sole authority of investment decisions will be with the portfolio manager.



You may opt for non discretionary services where the client has the option to invest/not invest at his own discretion on the basis of the portfolio manager’s recommendations.


 
9. What is an Investment Horizon Period that I should keep in mind before providing funds to you ?


 


There is no lock in period. However, considering the benefits of long term investments, it would be advisable to have the investment horizon period of at least 18-24 months.  


10. How do I know value of my portfolio ?
You will specific username and password which can be used to login on our website and can see the portfolio statements.  As per SEBI instructions, a Portfolio Manager is required to furnish performance report to their clients every 6 months.
11. How are the fees charged for the Portfolio Management services ? 


 


The fees will be as per agreement between you and the Portfolio Manager. The fees will be payable annually depending on the growth and the value of the portfolio at the year end.


12. What kind of return can I expect ? 


 


As per SEBI guidelines, a portfolio manager cannot give any guarantee towards achieving any specific returns.  However, with a calculated risk and keeping downside protection in mind, we will endeavour to outperform the returns provided by the stock market indices.
13. How safe are my securities under portfolio management service ? 


 


We are registered as a Portfolio Manager with Security Exchange Board of India (SEBI) and are governed by them through regulations and regular reporting. Our Certificate of Registration as Portfolio Manager is INP000004854. Orbis Financial Corporation Ltd.  is a Depository Participant with National Securities Depository Limited (NSDL).  This ensures complete safety in operations. Stock ownership always rests with the client.
14. What are the risks involved ? 


 


Investments are subject to market risks and there is no assurance or guarantee that the objective of the Portfolio Management Service will be achieved. The value of return on investments made may appreciate or depreciate to an unpredictable extent. Past performance of the portfolios does not indicate the future performance.


15. How do I sign up ?


 


You can send us an email at support@acepro.in or call us on 022-26528671/72 and our representative will get in touch with you.
16. Can a non-resident Indian (NRI) / Person of Indian Origin (PIO) invest in shares in India?


Yes, NRI can purchase shares of an Indian company on a stock exchange in India, under the portfolio investment scheme on repatriation and / or non-repatriation basis. PIO is considered as a NRI and hence all the benefits / conditions shall apply accordingly.


17. How can NRI invest in shares in India?


 


As per Reserve Bank of India (RBI) guidelines, NRI who wishes to invest in shares in India, needs to approach the designated branch of any authorized dealer (bank) for routing his transactions relating to purchase and sale of shares under the PIS (Portfolio Investment Scheme).

NRI has to open a Bank Account, Demat Account with the authorized dealer (bank) and a trading account with a registered stock broker. 


18. How the investment is bifurcated between repatriation and non-repatriation basis?


 


If the investments are made through the Non Resident External (NRE) Rupee Account, then such investments and proceeds from such investments would be considered as on repatriation basis and can be freely repatriable. 

If the investments are made through the Non Resident Ordinary (NRO) Rupee Account, then such investments and proceeds from such investments would be considered as on non-repatriation basis. 

The funds from NRO account can be repatriated freely if the amount does not exceed 1 mn USD per financial year and the remitter has to submit an undertaking and a certificate by a Chartered Accountant in prescribed form. 


19. What is the difference between investments done through NRE and NRO accounts?


 


Apart from repatriation conditions as discussed in the above question, practically there is no difference as far as investments are concerned. However, the interest income earned on NRO attracts income tax deduction at source.
20. How payments could be made by NRIs for shares purchased on stock exchange?


Payment for purchase of shares on repatriation basis has to be made by way of inward remittance of foreign exchange through normal banking channels or out of funds held in NRE account maintained in India. If the shares are purchased on non-repatriation basis, the NRIs can utilise their funds in NRO account in addition to the above.
21. How the proceeds from the investments be credited?


The sale proceeds, dividends etc., will be credited (net of taxes) to the NRE account in case the investments were made was on repatriation basis. In case of non-repatriation basis, the proceeds would be credited to NRO account.
22. How the funds can be remitted outside India?


Transfer from NRE: Transfer of funds from an NRE is freely permitted, subject to payment of taxes, as applicable.  Transfer from NRO: Transfer of funds from NRO account is permitted within the overall ceiling of USD one million or equivalent per financial year (April - March), subject to payment of taxes, as applicable. You need to submit Form 15CA (online application form) and 15CB (Chartered Accountant Application) to your Branch for transferring funds.
23. What is the tax implications on income received from investments in shares in India?


Equity shares are treated as short-term capital assets if they have been held for less than 365 days. The shares held for more than 365 days then they qualify as long-term capital assets. Dividend Income 
Dividend income received by virtue of holding Indian company shares is not taxable in the hands of the shareholders. 

Long Term Capital Gain
Any gain arising out of sale of shares (held for >365 days) would be classified as long term capital gains and the same will be not chargeable to income-tax.

Short Term Capital Gain
If the shares (<365 days) are sold and there is gain, then it will attract 15% capital gains tax.

24. Is it compulsory for an NRI to file tax returns?




A NRI is required to furnish his return of income if his total taxable income exceeds the maximum amount which is not taxable. As per the income-tax laws, a NRI is not required to furnish return of income, if -

  • Total income consists only of investment income from foreign exchange assets or long-term capital gains or both.
  • Tax has been deducted at source on such income.
Thus, from the above, it can be derived that if NRI has income from Short Term Capital Gains on equity shares, he would be required to file tax returns in India.
26. Are there risks associated with PMS investments?
Yes. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than investments in larger companies.

AcePro

Address: 401, 4th Floor, Manek Plaza, 167 Vidya Nagari Marg,
Kalina, Santacruz (E), Mumbai - 400098 , Maharashtra , India

022-26528671/72

support@acepro.in

Copyright 2015 . Sarthi Group