SEBI misrepresents public information on PMS as fiduciary; offers mindless response to simple RTI query

A simple query to SEBI about aggregate list of assets under management was stymied as being fiduciary in nature, when parts of that information are already available in public domain. It shows SEBI’s intention to stall, rather than share information, with the public

In response to a RTI (Right to Information) application seeking information about notorious portfolio management services (PMS) of banks and brokers, market regulator Securities and Exchange Board of India (SEBI) has responded in a manner that defies logic. It has refused to disclose information on the quantum of Assets under Management (AUM) of each PMS, citing “fiduciary reasons”. Ironically, even as SEBI is busy doing this stalling act under its own rules for PMS, each PMS provider has to provide this information. All the RTI application was seeking this information in aggregate so that comparison and analysis is easier. SEBI ought to have it and share it. Certainly, saying that is fiduciary in nature is a lie. Once again it shows SEBI’s anti-consumer attitude.

An RTI was filed by an investor to seek information to find out which were the largest PMS, the best performing PMS, and so on. When shared with the larger public this information would be beneficial for the general public. However, SEBI regards this kind of information as a “fiduciary” breach, and therefore the public is not entitled to it.

According to the reply to the RTI, dated 24 February 2012, it said: “Please note that SEBI maintains data regarding AUM of each PMS in fiduciary capacity and the same is exempt from disclosure under Section 8(1)(e) of the RTI Act, 2005.“

The irony is that the same information is put up in public domain, for all to see. Where’s the question of fiduciary breach? For example, you can check HSBCand ICICI below:

It is pertinent to note that every portfolio manager is required to disclose to SEBI, as well as to the public, critical information pertaining to PMS schemes on its website. SEBI, vide its circular IMD/DF/16/2010 dated 2 November 2010, it clearly stated, “To ensure compliance with regulation 14(2)(b)(iv) of SEBI (Portfolio Managers) Regulations, 1993, Portfolio Managers shall disclose the performance of portfolios grouped by investment category for the past three years as per the enclosed prescribed tabular format. Portfolio Managers shall also ensure that the disclosure document is given to all clients along with the account opening form at least two days in advance of signing of the agreement. In order to ensure that the clients have access to updated information about the portfolio manager, portfolio managers shall place the latest disclosure document on their website, wherever possible.” (emphasis ours)

Having said this, how would a potential customer or investor decide which PMS to invest? For this, the investor needs to compare and contrast the performance of all available PMS schemes, across categories; namely discretionary, non-discretionary and advisory services. Since the kind of information sought is not readily available anywhere, the only option for the investor is to jump from one website to another, or make calls to relationship managers who tend to window-dress the numbers. Considering that the minimum investment for PMS is now Rs25 lakh, it is not a small amount of money; it is high stakes and serious business, which requires equally serious research.

We found out that SEBI has published only consolidated figures which are currently available on the market regulator’s website for all investors to see. If one peeks into the details, it doesn’t offer much value to the discerning investor. An investor would be interested in comparing and contrasting each and every PMS scheme, the same way as one would do for mutual funds and insurance. However, SEBI has made it only more difficult for investors to obtain publicly available information, for reasons that defy logic. If RTI is not the recourse for obtaining cohesive and complete set of data, then one can expect to spend countless hours, or for that matter days, trying to fetch publicly available information, thus making lives of investors miserable, thanks to SEBI.



Dayananda Kamath k

4 years ago

because they are the bread and butter for sebi.they need investor complaints so that they can flees them at their whims and fancy.sebi itself does not follow its rules. best case is nissan copper issue the brokers andsebi barred the purchaser from selling the stock by not giving creedit of the purchased share for 15 days and by then it has become a less than penny stock. for non delivery of shares there is auction rule. but here purchaser were made to suffer. if any other country chairman sebi would have been put behind bars for such acts.


4 years ago

I have had a similar experience. Having been a victim of "Vanished Companies" post IPO's between 1990 to 2000 , I sought consolidated information under RTI querry on Merchant Bankers of such Vanished Companies , so that Investors can avoid being taken for another ride . I was denied the information under the pretext that I will have to collect it myself from RHP's filed on SEBI web site! In another RTI querry, I wanted to know which Brokers are accused of Unauthorised trading by clients and how many cases are pending for Arbitration . This too was stonewalled under the same excuse of "Information being fiduciary ". This is cock & bull story. SEBI is unfortunately indulging in protecting unscrupulous Merchant bankers , Portfolio managers & Brokers, contrary to its charter .

pawan agrawal

5 years ago

sebi is working against the interest of investors

sebi always supports wrong doer brokers and companies

Nagesh Kini FCA

5 years ago

SEBI Appealate Authority has to satisfy us what exactly they understand by the use of the term 'fiduciary'. It may be term picked up some babu from some Wall Street journal. He has just thrown this to push the query away!

dayananda kamath k

5 years ago

today regulators are the biggest manipulators. it is nice way to reply irrelevently to the quiries so that you will not again bother. when i wrote about fudging of accounts to corporate affairs ministry with subject as a satyam in bank. the under secretary treated it as claim from investor fund and informs me that there is no provision for refund. when i clarified the issue in my subsiquent letter. he had the audacity to send the same reply with new reference number. i wrote to the then minister for corporate affairs and again to veerappa moily about the insident and recover the entire salary paid to him till date as he is illiterate person sitting in such a high position .but no action till date.


P M Ravindran

In Reply to dayananda kamath k 5 years ago

This is the usual experience of citizens dealing with babus of all types- LDC, UDC or IAS- whether in the bureaucracy or judiciary!

P M Ravindran

5 years ago

When the ultimate authority on law- the CJI- resorts to such anti-transparency, anti-people and anti-national activities, why blame other lesser mortals. Worse, look at how KG Balakrishnan was rewarded for his subversion of the transparency law, by those whom we have empowered and pampered, to enact just laws and enforce them without fear or favour!

Dr Vaibhav G Dhoka

5 years ago

After initial years of its formation with first Chairman Ramkrishnan SEBI is and was mute to investors grievance.It swiftly changed its PREAMBLE instead of Investors interest it started caring for brokers from whom they receive hefty cuts.GOD save Indian investors.



In Reply to Dr Vaibhav G Dhoka 5 years ago

But Bhave was media's hero for his pro-investor actions.


5 years ago


R Balakrishnan

5 years ago

I wonder if someone could prosecute the SEBI Board on this issue. Absolute arrogance and devil may care. This is reflected in their treatment of investors, whom they are supposed to take care of, if not protect. With a regulator like this, we investors do not need any enemies. Shut down SEBI. We can live without SEBI. In any case, their being around is simply superficial and useless. Without them, we would be forced to be on our guards and protect ourselves better.


5 years ago

This is absolutely shocking. The PIO should be fined. Please file an appeal

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Sensex, Nifty to head higher: Tuesday Closing Report

If the Nifty closes above 5,310 tomorrow, it is likely to hit 5,370

After a flat opening, the market which received a boost from the RBI’s 50 basis point rate cut, closed in the green for the second day in a row. Today the Nifty made a higher high, an indication of the market heading higher. If the Nifty closes above 5,310 tomorrow, it is likely to hit 5,370. The National Stock Exchange (NSE) saw a volume of 65.06 crore being traded.

The market opened with a positive bias on hopes that the Reserve Bank of India (RBI) in its monetary policy for the current fiscal would cut rates in a move to boost liquidity. The Nifty started trade at 5,267, up 41 points, and the Sensex gained 50 points to resume trade at 17,201.

Markets in Asia were mostly lower as Spanish bond yields on Monday surged past the 6% mark, for the first time this year, raising doubts on the European Central Bank’s bond purchase plan. US stocks settled mixed on Monday as better-than-expected retail sales helped improve sentiments.

The benchmarks were flat in morning trade as the market waited for the much-awaited RBI policy announcement. The indices dipped to their intraday lows in early trade with the Nifty going down to 5,208 and the Sensex falling to 17,103.

The Sensex and Nifty surged over 1% post RBI announcement of a 50 basis points (bps) cut in repo rate. The development saw all sectoral indices trading in the green. However, the market came off the highs as investors were disappointed with the RBI governor D Subbarao ruling out further reduction in policy rate in the immediate future citing persistent upside risks to inflation and possible fiscal slippages.

The RBI, in its monetary policy for the current fiscal, cut the repo rate to 8%. However, it kept the cash reserve ratio (CRR), the portion of deposits which banks are required to keep with the central bank, unchanged at 4.75%.

The market retreated to its previous close in noon trade as investors resorted to profit booking at higher levels following a lower opening of the key European indices. But a recovery in European stocks helped the domestic indices stay in the positive. All-round buying support from institutional investors resulted in the market moving further northward in the late session.

British telecom operator Vodafone said it had served the Indian government with a notice of dispute regarding India’s proposal to retrospectively tax overseas transactions.

The benchmarks hit their highs towards the end of trade with the Nifty climbing to 5,298 and the Sensex surging to 17,382. Closing in the green for the second day, the market settled marginally off the highs. The Nifty gained 64 points (1.22%) at 5,290 and the Sensex finished trade at 17,358, up 207 points (1.21%).

The advance-decline ratio on the NSE was a positive 1007:655.

While the broader markets also ended in the green, they couldn’t match the Sensex. The BSE Mid-cap index gained 0.72% and the BSE Small-cap index rose 0.63%.

The sectoral gainers were BSE Realty (up 2.41%); BSE Metal (up 2.01%); BSE PSU (up 1.83%); BSE Capital Goods (up 1.67%) and BSE Power (up 1.64%).

ONGC (up 3.62%); Coal India (up 3.18%); Hindalco Industries (up 3.06%); DLF (up 2.76%) and Hero MotoCorp (up 2.71%) topped the Sensex list. Mahindra & Mahindra (down 0.47%); Reliance Industries (down 0.25%) and Maruti Suzuki (down 0.03%) settled lower on the index.

The Nifty was led by Reliance Infrastructure (up 6.13%); Reliance Communications (up 5.57%); ONGC (up 4.19%); Reliance Power (up 3.88%) and Jaiprakash Associates (up 3.32%). The key losers were Cairn India (down 1.36%); HCL Technologies (down 0.78%); Dr Reddy’s Laboratories (down 0.69%); Kotak Mahindra Bank (down 0.51%) and RIL (down 0.19%).

Markets in Asia settled lower on unending European debt concerns and on reports that foreign direct investment (FDI) into China dropped for a fifth month. FDI in China fell 6.1% in March to $11.76 billion from a year earlier, the ministry of commerce said in Beijing.

The Shanghai Composite declined 0.94%; the Hang Seng fell by 0.23%; the KLSE Composite shed 0.08%; the Nikkei 225 lost 0.06%; the Straits Times fell 0.18%; the Seoul Composite declined 0.37% and the Taiwan Weighted tanked 1.86%. At the time of writing, the key European indices were trading with gains of around 1% and the US stocks futures were in the positive.

Back home, foreign institutional investors were net sellers of shares totalling Rs509.43 crore on Monday. On the other hand, domestic institutional investors were net buyers of equities amounting Rs218.23 crore.

McNally Bharat Engineering Company has bagged a Rs298 crore contract from the West Bengal Power Development Corporation for its Sagardighi power (extension) project’s coal handling plant. The order envisages erection, services, supply of equipment and material. McNally Bharat closed 1.05% down at Rs98.50 on the NSE.

IG Petrochemicals has induced a planned shutdown of one of its PA Plant (PA-2) at Taloja, Maharashtra for change of catalyst. The shutdown is expected to last for around three weeks. The company has sufficient stock of PA in hand and supplies to its customers will be unaffected during the period of shutdown. The stock tumbled 5.33% to close at Rs24.85 on the NSE.

Essar Oil is in advance negotiations with the State Bank of India (SBI) to arrange for a six-year loan with an average interest rate of 12.5% in order to settle its Rs6,300-crore sales tax issue with the Gujarat government. If sanctioned, SBI’s exposure in Essar Oil alone will be close to Rs9,500 crore. Essar Oil settled at Rs53.90 on the NSE, up 0.94% over its previous close.


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