Paterson s PMS Operations

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1 Paterson s PMS Operations

Introduction Paterson Securities (P) Ltd. is a Chennai-based, SEBI registered Stock Broking firm that carries the legacy of Trust and Integrity for over 75 years.

2 Introduction Paterson Securities (P) Ltd. is a Chennai-based, SEBI registered Stock Broking firm that carries the legacy of Trust and Integrity for over 75 years. As the first broking firm in South India, we are pioneers in the field of Financial Services. Our main asset has been the long-lasting relationships we have built with our clients, many of them across several generations. We have built our reputation through a tradition of trust, reliability and transparency in our operations. Our loyal clientele include Institutional Investors, NRIs, Large Corporate Groups, High Net worth Individuals and more than retail investors. Paterson Securities (P) Ltd. is a subsidiary of Hinduja Bank (Switzerland), one of Asia s largest conglomerates, the Hinduja Group, which is spread across 32 countries. Our basket of Services include Stock Broking, Depository, PMS, Mutual Funds, Corporate Debt. We focus on innovation and excellent customer service. Paterson Securities has been SEBI registered Portfolio Management Service providers for the last 10 years. 8/24/2017 2

3 Portfolio Management Services -Operations The PMS account comprises the Trading, Depository and Bank account, which is operated under a Power of Attorney, registered in our favour for operational convenience. Paterson ensures the KYC and mandatory Reporting / Compliance, to SEBI and other Statutory bodies. Paterson also maintains the Accounts pertaining to the Transactions, charging of Fees, etc. 8/24/2017 3

4 The PMS & Compliance The PMS is regulated by SEBI and Paterson ensures that all the regulations governing the PMS are strictly adhered to. KYC is stringent and thorough, ensuring smooth flow after Account is opened. Reporting to SEBI is on Monthly, Quarterly and Annual basis. The PMS division comes under Internal Audit, and these reports are also submitted to SEBI Clients are provided an ID to raise their complaints and grievances, if any, and these are immediately addressed. Reporting to Clients is on regular basis, periodicity based on clients preference Reports for Tax purpose ( Capital Gains, STT, Booked Profit in the case of Derivatives, Transaction Statement, bank Statement, etc are provided ) 8/24/2017 4

5 PMS Documentation Process DOCUMENTS TO BE SUBMITTED Pass Port Size Photos (4 copies for Paterson & 4 for the Bank ) Cancelled cheque leaf from the PMS designated Bank account *. Address proof ( Bank Statement with minimum 6 months activity Driving license, Passport Copy, DL ) PAN Card ( 5 self attested copies ) Aadhaar Copy ( 2 self attested copies ) Cheque for Rs 15,000 to open Bank account * This will be available with Paterson after the Account is opened FORMS / AGREEMENTS TO BE EXECUTED Completed Client Registration form ( Brokerage a/c) Bank and Depository account opening forms Discretionary PMS Agreement Power of Attorney in favor of Paterson Note : Under the Portfolio Management Service for NRI s, Paterson has an arrangement with Indusind Bank, HDFC, etc. with whom the investor s Bank account is set up. All PMS related transactions including dividend credits are routed through this account. 8/24/2017 5

6 PMS for NRIs : Who is an NRI Person who does not reside in India for more than 182 days in any preceding financial year. Non Resident Indians is also someone who falls under the following broad categories: 1. Indian citizens who stay abroad for employment or for carrying on a business or vacation or for any other purpose in circumstances indicating an indefinite period of stay outside India. 2. Indian citizens working abroad on assignments with foreign Governments/government agencies or international/regional Agencies like the UNO, IMF, World Bank, etc. Who is a PIO? A citizen of any country (other than a citizen of Bangladesh or Pakistan) is deemed to be of Indian origin, if, He, at any time, held an Indian passport, or He or either of his parents or any of his grand parents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955,or Spouse (not being a citizen of Bangladesh or Pakistan or Sri Lanka) of an Indian citizen or of a person of Indian origin is also deemed to be a PIO. 8/24/2017 6

7 PMS for NRIs : Distinction between NRE account and NRO account: Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account cannot be remitted abroad but used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can only be credited to NRE accounts. Funds which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO account Non Resident Indian s and Persons of Indian origin can invest in Indian Equities under the Portfolio Investment Scheme(PIS), which allows an NRI to acquire shares of Indian companies or units of domestic mutual fund through stock exchanges in India. An NRI or a PIO can individually purchase shares up to 5% of the paid up capital of an Indian company. Investments can be made on both repatriation and non repatriation basis. 8/24/2017 7

8 Investment in Direct Equities PMS by NRIs & PIO s To be able to invest in the PMS, an NRI will need to set up the following accounts With a designated Banker NRE Savings a/c for investments made on repatriation basis NRO Savings a/c for investments made on non-repatriation basis Portfolio Investment scheme ( PIS ) a/c for routing of market transactions & RBI reporting With Paterson - CDSL Depository Account ( Repatriable / Non-Repatriable) PMS linked Brokerage a/c PMS Fee & other charges Portfolio Management Service Fees: As applicable Brokerage: 0.25 % per transaction, & statutory charges as applicable Depository charges : Waived Documentation charges : Waived 8/24/2017 8

9 General Information 1.All NRI transactions are reported to the Reserve Bank of India by the designated Banker 2. Speculative transactions i.e. buying and selling securities on the same day are not permitted in the case of NRI s 3.Transaction process : When a purchase or sale is made, Paterson forwards the original contract to the designated banker within 24 hours of the transaction.the Banker then releases payment to Paterson on the basis of the contract for purchases. In case of a sale, as per PIS guidelines, TDS on Capital gains if any, are deducted at the applicable rate while crediting the sale proceeds to the NRI Savings account. 4.If a customer already has a PIS portfolio and wishes to transfer the same to another Banker, he would need to normally submit the following documents- NOC from existing Bank Certified copy of valid approval Certificate from Banker confirming details of his current holdings (with date & cost of acquisition) purchased through the NRE/NRO a/c with them. 5.To invest on a repatriable basis, the amount representing the investment should be received by inward remittance through normal banking channels or debit to the NRE/FCNR account of the NRI. 8/24/2017 9

10 6. In case of non repatriable accounts, only the dividend arising out of the investment is eligible for repatriation 7. At present NRIs are not permitted to invest in Media & Nationalized bank stocks. 8. Only one PIS account can be maintained by a non resident for all market related transactions. 9. The PAN card is mandatory for almost any investment related activity in India. In case you need to apply for a PAN card, Paterson can assist you with the process. 10. Tax provisions: TDS (Tax Deducted At Source) As per regulatory guidelines, Tax (if applicable) has to be deducted at source for all the profits done in the equity market transactions by NRIs. Before crediting sales proceeds it is the responsibility of the remitter to determine the appropriate Tax and deduct it at source. Equities: Long-term capital gain - If the period of holding is more than 1 year i.e. the difference between the date of purchase and sell is more than 1 year, then the TDS rate applicable is 0 %. Short-term capital gain - If the period of holding is less than 1 year i.e. the difference between the date of purchase and sell is less than 1 year, then the TDS rate applicable is 15 % on capital gain. Charges and cess will apply as per regulations. No TDS is charged on losses. TDS is handled by the Bank. Dividend income tax free in the hands of the investor 8/24/

11 PMS Documentation Process For Non Resident Indians DOCUMENTS TO BE SUBMITTED Pass Port Size Photos (3 copies for Paterson & 4 for the Bank ) Cancelled cheque leaf from the PMS designated Bank account *. Passport and Visa copies, self attested (In duplicate) Address proof (Local & foreign) (Bank pass book / Statement with minimum 6 months activity or Driving license/utility Bill. PAN Card ( two self attested copies ) PIO card where ever applicable. FEMA Declaration. Investment cheque from an existing NRE Savings a/c or Overseas a/c (Repatriation basis) Investment cheque from an NRO account (Non-Repatriation basis ) Cheque for Rs 15,000 to open Bank account FORMS / AGREEMENTS TO BE EXECUTED Completed Client Registration form ( Brokerage a/c) Bank and Depository account opening forms Discretionary PMS Agreement Power of Attorney in favor of Paterson * Note : Under the Portfolio Management Service for NRI s, Paterson has an arrangement with Yes Bank & Axis Bank with whom the investor s Bank account is set up. All PMS related transactions including dividend credits are routed through this account. 8/24/

12 Paterson s Special Services to NRIs The main requirement is to have a Permanent Account Number ( PAN ); Paterson assists in acquiring PAN Paterson assists in setting up PIS and Bank accounts. Paterson offers Advisory on legal heir matters. Paterson assists in your yearly tax filing ( where needed ) We provide data in the format required, for NRIs to report their Indian earnings to their respective Tax Authorities We offer Advisory service and assistance on Repatriation of Funds 8/24/

13 Contact us CHENNAI Head Office 48, Vanguard House, 2 nd Line Beach, Chennai Tel: (044) Fax: (044) Corporate Office No. 3, Bhavani Mansion, 4 th Lane, N. High. Road Chennai Tel: (044) BANGALORE No. 183, 2 nd Floor, Opp Northside Hospital, 60ft Road, G Block, Sahakaranagar, Bangalore. Ph : For more information contact: Poornima Rao Mobile poornima@paterson.co.in 8/24/

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