SEBI may allow portfolio managers to trade in derivatives

The Securities and Exchange Board of India (SEBI) is examining whether registered portfolio managers can be allowed to invest in instruments other than listed securities.

"We are looking at other instruments like exchange traded derivatives for investments by portfolio managers," SEBI executive director R K Nair said in Kolkata on Friday.

The regulator has laid down various norms for portfolio managers to protect investor's interest. SEBI is looking at other structured products besides listed securities, Nair said at a seminar on portfolio management services organised by Indian Chamber of Commerce.

At present, there are 247 portfolio managers registered with SEBI and these entities have total assets under management of Rs2,72,000 crore.
 
Nair said SEBI is also trying to usher in more reforms in the primary and secondary markets to make the capital markets more fair, transparent and inclusive.
 
To prevent any scandal taking place in the realm of portfolio management, Nair said, SEBI had asked portfolio managers to de-pool the accounts of listed securities from their other clients. The regulator has also asked them to maintain capital adequacy ratio.

In this context, he said, the net worth of the portfolio managers should be at around Rs2 crore.

On educating investors, SEBI would reach out to school teachers for training in basic financial literacy. These teachers, in turn, would train their students on the various issues relating to preliminary financial matters.
 
The system to redress grievances is also being streamlined in the interest of investor protection, he added.