PMS quarterly report: what clients must receive
At least once every three months and on request, including the commission paid to the distributor.
A portfolio manager must send each client a report at the frequency agreed in the contract, but at least once every three months, and also whenever the client asks (Regulation 31). In practice that is a quarterly statement in the format SEBI prescribes in Annexure 5D of the Master Circular, plus an audited account statement once a year.
For a distributor the quarterly report is the main servicing conversation. It is where a client sees what they own, what they paid, what you earned from their account and how they actually did compared with the strategy.
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What Regulation 31 requires in every report
- check_circleComposition and value of the portfolio: each security, quantity, value, cash balance and total value on the report date.
- check_circleTransactions during the period, with dates and details of purchases and sales.
- check_circleInterest, dividends, bonus and rights shares received.
- check_circleExpenses incurred in managing the portfolio.
- check_circleRisks foreseen by the PM and risks in the securities it recommended.
- check_circleDefaults in coupon or other payments on debt securities, and downgrades to default rating.
- check_circleCommission paid to the distributor for that particular client.
What SEBI's quarterly format adds
Annexure 5D and paragraph 5.5 of the Master Circular structure the report into these blocks:
| Block | Contents |
|---|---|
| Account overview | Client details, account type, investment approach, its benchmark, joint holders, and the distributor's name ('Direct Plan' if none) |
| Portfolio allocation | Purchase and market value by asset type: equity, plain and structured debt, derivatives, mutual funds, cash and others |
| Portfolio summary | Opening and closing value, inflows, outflows, income, management fee, performance fee, expenses, realised and unrealised gains, distributor commission, brokerage |
| Other disclosures | Investments in associates or related parties, passive breaches of investment limits and their fix, credit ratings of debt and hybrid holdings, deviations from the investment approach |
| Fee calculation annexure | Required from October 1, 2024, in APMI's standard format |
How performance must be shown
Master Circular 5.6.2 sets the rule for performance reported to an investor:
- The client's own XIRR
- The investor's return for each investment approach they hold, calculated as XIRR, which accounts for the timing of their own inflows and outflows.
- Minimum, maximum and median XIRR
- Across all investors in that investment approach, so the client can see where their result sits.
- TWRR and benchmark
- The investment approach's time-weighted return and the trailing return of its benchmark, shown separately.
- Mandatory disclaimer
- That the client's performance may differ from other investors' and from the approach because of the timing of flows and differences in portfolio composition.
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What must never appear
No model portfolio returns, no performance of cherry-picked investors, and no category labels other than the SEBI Strategy the approach is tagged to (Master Circular 5.6.3). This applies to any entity reporting a PM's performance, which includes a distributor's own presentations.
Other reporting rights
- check_circleReports may be placed on the PM's website with restricted access for each client (Reg 31(2)).
- check_circleOn termination, the client gets a detailed statement of accounts and settlement as agreed (Reg 31(3)).
- check_circleThe client may obtain details of their portfolio at any time (Reg 31(4)).
- check_circleAn audited account statement is provided annually (Investor Charter).
How XXI-A tests this
The favourite question asks the maximum reporting interval: three months, plus on request. Scenario questions describe a client asking for a report mid-quarter; the PM must provide it. Content questions list items and ask which is required; distributor commission paid for that client and coupon defaults are both in. The trap is picking 'half-yearly', or thinking a client report may show model portfolio returns.
FAQs
How often does a PMS send reports to clients?expand_more
At the frequency agreed in the contract, but at least once every three months, and whenever the client asks.
Does the PMS report show the distributor's commission?expand_more
Yes. Regulation 31 requires the commission paid to the distributor for that particular client, and the quarterly format lists it in the portfolio summary.
What performance figures does a PMS report show?expand_more
Your XIRR for each investment approach you hold, the minimum, maximum and median XIRR across all its investors, and the approach's TWRR and benchmark return shown separately, with a disclaimer that timing and portfolio differences cause gaps.
Do PMS clients get an audited statement?expand_more
Yes. SEBI's Investor Charter for PMS lists an audited account statement provided to each client annually.