Section 12E in Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993
12E. Obligation and Responsibilities of Eligible Fund Managers.
- An eligible fund manager shall be required to:(1)comply with the requirements specified under Section 9A of the Income-tax Act, 1961 or any amendment, notification, clarification, guideline issued thereon; 4(2)offer discretionary or non-discretionary or advisory services or a combination thereof to eligible investment funds;(3)operate in accordance to its mutually agreed contract with the eligible investment funds;(4)provide all material disclosures to eligible investment funds;(5)segregate funds and securities of each eligible investment fund;(6)segregate the funds and securities of eligible investment funds from that of its other clients;(7)maintain and segregate its books and accounts pertaining to its activities as a portfolio manager to eligible investment funds and other clients;(8)appoint a custodian: Provided that requirement of compliance to this sub-regulation does not arise in case an eligible investment fund has already appointed a custodian under the applicable act or regulations;(9)keep the funds of eligible investment funds in scheduled commercial banks:Provided that requirement of compliance to this sub-regulation does not arise in case an eligible investment fund does not intend to invest in Indian securities;(10)maintain any additional records as may be specified by the Board and disclose the same to the Board as and when required;(11)provide quarterly reports to the Board;(12)ensure compliance with the Prevention of Money Laundering Act, 2002 and rules and regulations prescribed thereunder;(13)abide by the provisions in these regulations and circulars / guidelines issued from time to time by the Board.
