Unlike a mutual fund, a PMS offers a customized investment service for HNIs, where every portfolio is cut-out to meet the unique needs of the client. Also, a PMS provides to the client a possibility of getting a qualitative diversification compared to his/her mutual fund investments. A dedicated portfolio manager oversees the portfolio, to ensure the client’s objectives are met.
o3 Securities is a SEBI registered Portfolio Manager(Registration no: INP000005430)
A PMS can be run in either a discretionary or a non-discretionary mode. Under a discretionary account, the client provides an investment mandate to the portfolio manager, who makes the investment decisions with the mandate serving as a guide. Under a non-discretionary account, the portfolio manager provides investment ideas to the client, while the final investment decisions are at the client’s discretion.
While there are no returns that can be guaranteed, the PMS returns and risk are dependent on the underlying investments and the investment mandate.
Example: An equity mandate bears the same underlying risk of equities.
There is no lock-in period. A client is free to redeem partly/wholly or add in part/whole from/to his account under PMS.
The client may withdraw partially from his portfolio, in accordance with the terms of the agreement between the client and the Portfolio Manager. However, as per the SEBI guidelines, the portfolio value after the partial withdrawal shall not be less than the applicable minimum investment amount of Rs. 50,00,000.
We recommend any equity mandate only for a long-term horizon, as the performance of equities tend to be volatile in the short-term.
We typically serve HNWIs, Family Offices, and Institutional clients. As per SEBI norms, a minimum investment corpus of INR 50 Lakh is required to open a PMS account.
The minimum amount of top up is INR. 1 Lakh given that the portfolio value of the said client is above INR. 50 lakhs on the day of the top up. If the client’s portfolio value is less than INR. 50 lakhs, then the minimum amount for top up would be the balance amount needed for the portfolio value to be equivalent to INR. 50 lakhs.
We offer the following curated list of investment approaches to suit client’s diverse requirements, you can view the details here.
We can easily be reached by dropping an email to pmsassist@o3capital.com. We alsohave dedicated personnel to attend to any needs or queries of our clients or prospects.
We are most welcome to clients requiring any discussion with regards to their portfolio by simply making a call or scheduling an appointment with us. However, for any regular update, we leverage technology to ensure that the client has a direct and secure online access to his portfolio, viewable on a daily basis.
The Portfolio Manager emails the following reports on a monthly basis to the client’s registered email ID.
(a) Portfolio Value and composition viz., description of securities, number of securities, value of each security, cash balance and the aggregate value of the portfolio on the date of report.
(b) Details of the securities transacted in the portfolio during the said period.
(c) Details of expenses incurred during the said period of sending the reports.
(d) Details of Interest / Dividends / Income (If any) during the said period of sending the reports
(e) details of risk foreseen by the Portfolio Manager and the risk relating to the securities recommended by the Portfolio Manager for investment or disinvestment.
(f) details of commission paid to distributor(s) for the particular client.
We provide each client with a secure and unique account login ID and password which they can use to view their portfolio reports as of the previous trading day’s portfolio value. The client can use this login access anytime to view their portfolio.
The portfolio manager will charge the Management fee, or a combination of Management fee and performance-based fee as agreed with the client.
Alpha is when the annualised portfolio return of the client has outperformed its benchmark index return.
To explain “Positive” Alpha, we will take help of the following scenario:
In a span of 1 year if the portfolio has returned 8% and the benchmark index has returned 5%, the outperformance is (8% - 5%), which is 3%.
As per the above scenario, the portfolio return has outperformed its benchmark returns and this outperformance is called Alpha.
A Positive Alpha is, where the portfolio has outperformed its benchmark in a positive market.
TWRR: Time-weighted rate of return (TWRR) is a calculation designed to measure the performance of the portfolio over the period invested, it eliminates extraneous/irrelevant factors not usually under a Portfolio Manager's control, such as inflows and outflows.
XIRR: XIRR (Extended Rate of Return) measures the performance of the cash flow, it is a single rate of return which is calculated on all transactions made by the client (investments and withdrawals) that have been made at different points of time. It would give the current rate of return on such transactions.
Let us explain by way of an illustration as below:
Consider that the frequency of charging of the performance fees is annual. A client’s initial contribution is ₹50,00,000, which then rises to ₹60,00,000 in its first year; a performance fee/ profit sharing would be payable on the ₹10,00,000 return. In the next year the portfolio value drops to ₹55,00,000 hence no performance fee would be payable. If in the third year the Portfolio rises to ₹65,00,000, a performance fee/profit sharing would be payable only on the ₹5,00,000 profit which is portfolio value in excess of the previously achieved high water mark of ₹60,00,000, rather than on the full return during that year from ₹55,00,000 to ₹65,00,000
A Non Resident Indian can invest directly in Indian equities.
In order to invest in the Secondary markets in India, NRIs need to obtain permission from the RBI. In order to do so, a designated bank account has to be opened under the PIS and all transactions related to the investment in the secondary markets need to be routed through this account.
Auditor- The books of accounts are audited yearly by qualified auditor to ensure that the portfolio manager has followed proper accounting methods and procedures in accordance with the law. The portfolio accounts are audited annually, and the certified copies issued by the chartered accountant is provided to the client.
Our Auditor is MP Chitale & Co.
Custodian- Is an entity that is vested with the responsibility of holding funds and securities of the PMS Clients, besides safeguarding securities. A custodian also settles transactions in these securities and keeps a track of corporate actions on behalf of its clients.
We are availing the custodial services of HDFC Bank and Kotak Mahindra Bank.
The PMS Account can be funded by transferring Cash, Listed Securities or a combination of both.
Cash: The initial/additional corpus can be introduced in the form of cash by funding the designated bank account of the portfolio manager where the demat account of the client has been opened. The client can also issue a cheque favouring “o3 Securities Private Limited” at the time of account opening.
The bank details of the portfolio manager are given below for transferring funds via RTGS/NEFT:
Custodian: | HDFC Bank Ltd. |
Beneficiary Name: | o3 Securities Private Limited |
Beneficiary Address: | No.5 Crescent Road High Grounds Bangalore - 560001 |
Bank Name & Address: | HDFC Bank Ltd, Fort branch, Mumbai - 400001 |
Bank A/c Number: | 50200026053390 |
IFSC Code: | HDFC0000060 |
Custodian: | Kotak Mahindra Bank Ltd. |
Beneficiary Name: | o3 Securities Private Limited |
Beneficiary Address: | No.5 Crescent Road High Grounds Bangalore - 560001 |
Bank Name & Address: | Kotak Mahindra Bank Ltd., Nariman Point, Mumbai - 400021 |
Bank A/c Number: | 7046428096 |
IFSC Code: | KKBK0000958 |
Securities: The securities can be transferred to the PMS demat account opened with our custodians by giving an “Off Market transfer of Inter-depository transfer” instructions from the existing depository of the clients, provided that the name of the account holders, account type, sub-category and holding pattern of both the demat accounts are same.
Step 1: For initiating the transfer of securities, the client can either submit a closure-cum-transfer request or give an off-market or inter-depository transfer instructions to their existing depository along with the
CML copy of the PMS demat account provided by us. The CML copy needs to be attested by the custodian Bank (HDFC / Kotak).
Step 2: After the securities are transferred to the PMS demat account, the client will have to provide the original date and cost of purchase of these securities. This would help us to record the original cost and date of purchase while inwarding the shares transferred to the PMS Account. In case, the acquisition cost and date of purchase are unavailable / not provided then the securities will be inwarded without these details at the previous day’s closing prices of the securities transferred.
Note: Pursuant to SEBI (Portfolio Managers) Regulations, 2020 the PMS Account can only be activated if the initial corpus introduced is equivalent to a minimum investment amount of Rs. 50,00,000/-
When the PMS account is funded, the cash is deployed in the chosen Investment Approach(es). The cash is used to buy listed equity shares to build the client’s portfolio at the discretion of the portfolio manager. The purchased equity shares will then be credited in the PMS demat account which is opened in the name of the client. Apart from the equity shares, the remaining cash is invested in Liquid ETFs and a component is maintained in Cash to manage the liquidity of the portfolio.
The securities transferred by the clients towards corpus can be sold by the portfolio manager at their discretion. The portfolio manager shall not be liable for any tax implications on sale of these securities
The exact time taken to build a portfolio is not pre-defined. Under normal conditions, It may take the portfolio manager around eight to ten weeks to fully construct the portfolio. The portfolio manager may choose to hasten up or delay the deployment of funds depending on the market conditions.
The tax liability of a PMS investor is similar to that of an individual buying and selling shares directly. Income from shares is taxable asCapital gains. The Portfolio Manager provides quarterly statements and the audited statement of accounts at the end of the financial year to aid the investor in assessing their tax liabilities. However, the investor should consult their tax advisor to help them pay the right amount of tax and on time.
Investors would find the name, address, and telephone number of the investor relation officer of the Portfolio Manager (who attends to the investor queries and complaints) in the Disclosure Document.
The investor can raise their concern / grievances by sending an email to us on pmsassist@o3capital.com
The investor may also raise a complaint using the following link.
If the complaint or grievance remains unresolved within a stipulated time of 7 days, then investor may escalate to SEBI by lodging their complaint online with SCORES (SEBI Complaints Redress System) and subsequently view its status on SCORES website. The PMS clients may register their complaints by filling up the online form on the link provided above and send reminders/s (if needed) for their complaints to the SEBI.
Investors can log on to the website of SEBI (www.sebi.gov.in) for information on SEBI Regulations and circulars pertaining to Portfolio Managers. Addresses of the registered Portfolio Managers are also available on the SEBI website.
Information on monthly reports submitted by Portfolio Managers to SEBI can be accessed using this link.
1. How do I open a PMS account with o3 Securities?
For all our resident clients, we open the demat account with the Custodian. The accounts opened are managed by the Custodian, and therefore have certain unique features. The special features include higher level of security, ability to do settlements through the institutional system, etc.
For non-resident clients, we open the bank account managed by a Custodianthat is exclusively used for PMS transactions.
2. Can I use my existing bank or demat account for PMS transactions?
No, new bank or demat accounts need to be opened.
The Documents required open your Portfolio Management Services Account are:
Document Checklist
a. Resident Account opening Requirements
b. Non Resident Account opening Requirements
c. Corporate Account Opening Requirements