The Investor Charter is a critical document that outlines what clients are entitled to expect from portfolio managers. This article explains the Investor Charter requirements and how to display it.
What is the Investor Charter?
Definition
The Investor Charter is a document in an easy to understand language that details different services provided by the portfolio managers to the investors along with estimated timelines, like account opening, agreement with the portfolio manager, periodic statements to the investors, investor grievance redressal mechanism, responsibilities of investors etc. at one single place for ease of reference.
Purpose
The Investor Charter aims to:
- Enhance awareness of investors about the various activities
- Set clear expectations for services
- Provide transparency in service delivery
- Outline grievance redressal mechanisms
Contents of the Investor Charter
Vision and Mission Statements
Vision: To implement diligently researched customised investment strategies which help investors meet their long-term financial goals in a risk appropriate manner.
Mission: To ensure that the Portfolio Management Services industry provides a viable investment avenue for wealth creation by adopting high levels of skill, integrity, transparency and accountability.
Business Details
Details of business transacted with respect to investors:
- Appropriate risk profiling of investors
- Providing Disclosure Document to investors
- Executing the PMS agreement
- Making investment decisions on behalf of investors (discretionary) or investment decisions taken at the discretion of the Investor (non-discretionary) or advising investors regarding their investment decisions (advisory)
Services and Timelines
The charter must detail services provided to investors and estimated timelines:
| Service / Activity | Timeline |
|---|---|
| Opening of PMS account (resident) | 7 days |
| Opening of PMS account (non-individual) | 14 days |
| Opening of PMS account (non-resident) | 14 days |
| Registration of nominee | Along with account opening |
| Modification of nominee | 10 days |
| Uploading of PMS account in KRA | 10 days |
Grievance Redressal Mechanism
The charter must detail:
- Name, address and telephone number of the investor relations officer
- Grievance redressal and dispute settlement mechanism
- How to access SCORES
- Contact details for complaints
Investor Rights
- Check registration status of the intermediary
- Submission of KYC documents
- Read terms and conditions carefully
- Study Disclosure Documents
- Accurate risk profiling
- Study quarterly statements
- Provide negative list of securities
- Update KYC documents
Investor Responsibilities
- Deal with registered portfolio manager only
- Check registration status
- Read terms and conditions carefully
- Study Disclosure Documents
- Accurate risk profiling
- Complete KYC and application form
- Provide complete details of negative list of securities
- Update KYC and personal details
Display Requirements
Website
All registered Portfolio Managers are advised to bring to the notice of their clients the Investor Charter by prominently displaying on their websites.
Mobile Apps
The Investor Charter should be displayed on mobile apps.
Office Display
The Investor Charter should be made available at prominent places in the office.
Client Onboarding
A copy should be provided as part of client onboarding.
Expert Legal Guidance
Anuj Desai & Associates provides expert legal advisory services on Investor Charter compliance for portfolio managers. Our securities law experts help clients develop compliant Investor Charters, ensure proper display, and maintain regulatory compliance. Contact us for guidance on Investor Charter and other regulatory matters.