Time and again I have been saying that it is easy for a regulator to go after an industry that is reasonably well organised rather than a completely new one. This is the reason why there is:

no white paper on how people lose money in real estate (whom will you chase?)

no white paper on media and the markets (SEBI says the media has to come up with it). L O L. Media cannot and will not.

One area that SEBI has to just cut paste some of the MF regulations is the PMS. Like having trustees to supervise, bring limits on custodian charges, brokerage (not more than 5% business with one broker)….and such things. Not yet done. No interest in doing. As one regulator put it, when there are only 100 vehicles on the road we will not install the signals. Signals make sense only when there are 100,000 vehicles. To me this sounds stupid, but that is what I heard.

One person who launched a PMS told me ‘It is clearly a case of backward integration’. This move ensures that all my overheads in the brokerage firm will surely be covered by MY OWN PMS Activity….

One PMS player once told me that any person with less than Rs. 15 crores was not a fit client for him. It was clear that he had only 10-12 clients. One important criteria for him was could he meet them in the eye and talk – and would they understand ‘relative’ return. Later on sales pressures forced him to reduce it to Rs. 1 crore. Poor chap he is still around. He has done a great job is a different story. One more PMS company has a 8% target – the company should make atleast 8% TOTAL INCOME from the PMS corpus – at the gross.

Today Sucheta Dalal of Moneylife has done a story on PMS…hence this quick story and here is the link…


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