SEBI published the protocol for providing co-investment services


Posted on 10 December 2021


For Illustration Purpose Only.

On December 10, the capital markets regulator, the Securities and Exchange Board of India (SEBI), published the protocol for providing co-investment services through the portfolio management route. This comes after SEBI revised portfolio manager guidelines last month to allow investors in Alternative Investment Funds (AIFs) to co-invest through the portfolio management channel. According to a circular issued by SEBI, a manager of an AIF who is also a registered portfolio manager and wishes to provide co-investment services through the portfolio management route must first notify the regulator. It further stated that any other manager who is not a registered portfolio manager and seeks to provide co-investment services through the portfolio management route must apply for portfolio manager registration with SEBI. If a portfolio manager wishes to provide portfolio management services (PMS) other than co-investment, he or she must comply with all terms of the PMS rules, including eligibility criteria, and obtain SEBI's prior approval. Portfolio managers will be required to submit a monthly report on their portfolio management activity on the intermediaries site within seven working days of the end of each month, according to the regulator. This must be presented in the updated format, which includes information about the portfolio manager's offer of co-investment. Furthermore, portfolio managers will be required to provide a quarterly report to their customers in accordance with the amended structure, which includes details of co-investment opportunities given by the portfolio manager. From April 2022 onwards, the reporting requirements under the amended formats will apply to monthly reports to SEBI and quarterly reports to clients.



Key Points

  • On December 10, the capital markets regulator, the Securities and Exchange Board of India (SEBI), published the protocol for providing co-investment services through the portfolio management route. 

  • Furthermore, portfolio managers will be required to provide a quarterly report to their customers in accordance with the amended structure, which includes details of co-investment opportunities given by the portfolio manager. From April 2022 onwards, the reporting requirements under the amended formats will apply to monthly reports to SEBI and quarterly reports to clients.