APMI
Also written Association of Portfolio Managers in India · Association of Portfolio Managers of India
The Association of Portfolio Managers in India — the PMS industry body that prescribes benchmarks and valuation norms, standardises client documents and registers PMS distributors.
In plain language
SEBI writes the rules for portfolio managers. APMI is the industry body that fills in much of the practical detail. If you are a PMS distributor, it is also the body you must register with before you can sell.
In the workbook, APMI does five separate jobs:
- SEBI asked its views on the simpler disclosure document.
- It published the standard format for the Most Important Terms and Conditions (MITC) document.
- It sets the benchmarks each PMS strategy may use.
- It sets valuation norms for debt and money market securities. It also approves the valuation agencies for them.
- It oversees PMS distributors as a group, because they must register with it.
So, after SEBI itself, it is one of the bodies the paper names most often.
How it works
APMI's roles in the workbook, by chapter.
| Role | Detail | Chapter |
|---|---|---|
| Disclosure document | SEBI, in consultation with APMI, introduced a simplified format via circular dated 9 September 2025, in a static part (items 1–11) and a dynamic part (items 12–16) | 8.2 |
| MITC | APMI published the standard MITC format; required for clients on-boarded on or after 1 October 2024, and to be informed to existing clients by 1 January 2025 | 8.3.5 |
| Benchmarks | APMI prescribes a maximum of three benchmarks for each strategy; the portfolio manager selects one per investment approach | 9.3.8 |
| Valuation | APMI prescribes standardised valuation norms and empanels valuation agencies; portfolio managers must use only empanelled agencies to value debt and money market securities | 10.6 |
| Distributors | Any person or entity distributing PMS must obtain registration with APMI; portfolio managers must ensure their distributors are registered (SEBI circular dated 2 May 2024) | 12.5 |
The distributor code of conduct (Chapter 12) opens by requiring distributors to adhere to the SEBI (Portfolio Managers) Regulations, 2020 and APMI circulars on distributors, distribution and advertising practices.
What APMI does not do. It does not grant registration to portfolio managers — no person may act as a portfolio manager without a certificate from SEBI. And although it supplies valuation prices through empanelled agencies, the ultimate responsibility for fair valuation stays with the portfolio manager.
A worked example
Illustrative individual; the requirements are the workbook's.
Nisha, a mutual fund distributor in Pune, wants to start distributing PMS.
| Step | What APMI's role means for her |
|---|---|
| 1. Registration | She must register with APMI. A portfolio manager cannot engage her unless she is registered. She also needs valid certification as specified by SEBI. |
| 2. Selling | She must follow APMI circulars on distribution and advertising, and be fully conversant with the disclosure document — whose simplified format APMI helped design. |
| 3. On-boarding a client with ₹60 lakh | The client receives the disclosure document and, after the agreement, the MITC in APMI's standard format, which the client must acknowledge. |
| 4. Explaining performance | The investment approach is compared with a benchmark chosen from APMI's list of up to three for its strategy. |
| 5. Explaining the debt portion | The bonds and commercial paper are valued using prices from an APMI-empanelled valuation agency — with the portfolio manager still responsible for fair value. |
Every stage of Nisha's work touches something APMI prescribes, even though SEBI remains the regulator and the portfolio manager remains responsible to the client.
Why NISM asks about it
APMI appears in Chapter 8 (disclosure document and MITC, 13% weightage), Chapter 9 (benchmarks, 15%), Chapter 10 (valuation, 10%) and Chapter 12 (distributor registration and code of conduct, 10%). For a paper aimed at PMS distributors, the registration requirement is the most directly relevant, and "who prescribes the benchmarks" and "who empanels valuation agencies" are straightforward recall questions.
Common exam traps
- APMI registers PMS distributors; SEBI registers portfolio managers.
- Up to three benchmarks per strategy, not per investment approach and not per portfolio manager.
- Empanelled valuation agencies are for debt and money market securities, and responsibility for fair valuation remains with the portfolio manager.
- The simplified disclosure document came from SEBI "in consultation with APMI" — SEBI issued it, APMI did not.
- MITC dates: new clients from 1 October 2024; existing clients informed by 1 January 2025.
- Name inconsistency. Chapter 8 expands APMI as "Association of Portfolio Managers in India"; Chapter 9 as "Association of Portfolio Managers of India". It is the same body.
Check yourself
1.Under the performance benchmarking framework described in the workbook, which statement is correct?
- a)Each investment approach may be tagged to any number of strategies
- b)APMI prescribes a maximum of three benchmarks per strategy, and the manager selects one of them for the investment approach
- c)SEBI selects the benchmark for every investment approach
- d)The manager may choose any index it likes as a benchmark
Show the answer
Answer: (b) APMI prescribes a maximum of three benchmarks per strategy, and the manager selects one of them for the investment approach
APMI prescribes a maximum of three benchmarks for each strategy, and when tagging an IA the portfolio manager selects one of them.
Each IA is tagged to one and only one strategy (option A is wrong). The selection is made by the manager, with its Board responsible for appropriateness — not SEBI. And the choice is limited to APMI's list, not any index.
2.A portfolio manager's written policies on order placement, pooling of orders, trade allocation among clients and segregation of margins must be approved by:
- a)The Board or equivalent body of the portfolio manager
- b)The Principal Officer alone
- c)The Compliance Officer alone
- d)APMI
Show the answer
Answer: (a) The Board or equivalent body of the portfolio manager
The workbook says: “These policies … need to be approved by the Board/equivalent body of the Portfolio Manager.”
The Principal Officer and Compliance Officer come in at a different point: a deviation from these policies, allowed only on account of exigency, needs their joint prior written approval with a detailed rationale. Neither of them alone approves the policies. APMI is the industry association; it does not approve an individual manager's internal policies.
3.Any person or entity involved in distributing portfolio management services must:
- a)Register with AMFI
- b)Obtain registration with APMI
- c)Register directly with RBI
- d)Have no registration, only certification
Show the answer
Answer: (b) Obtain registration with APMI
To facilitate collective oversight, distributors must mandatorily obtain registration with APMI, and portfolio managers must ensure this (SEBI circular of 2 May 2024). Distributors must also hold valid certification at all times — both are needed.
AMFI is the mutual fund industry body, a common distractor.
Where this is taught
- Series XXI-B · Chapter 7: Role of Portfolio Managersintroduced here
- Series XXI-A · Chapter 8: Operational Aspects of Portfolio Managersintroduced here
- Series VII · Chapter 8: Other Services Provided by Brokersintroduced here
- Series XXI-B · Chapter 20: Performance Measurement and Evaluation of Portfolio Managers
- Series XXI-A · Chapter 9: Portfolio Management Process
Related terms
- Portfolio Management ServicesA tailored investment service where the client owns the securities directly in their own name, regulated under the SEBI (Portfolio Managers) Regulations, with a minimum investment of Rs 50 lakh.
- Portfolio managerA body corporate registered with SEBI that, under a contract with a client, advises on or manages that client's securities or funds — discretionary, non-discretionary or advisory.
- Customised benchmarkA benchmark built from a portfolio manager's own investment universe, used when no market index fits the manager's strategy or style. Valid, but costly to build and maintain.
- Investment approachA broad outlay of the securities and permissible instruments a portfolio manager will invest in for a client, set out in the PMS agreement and tagged to exactly one strategy.
- Money Market InstrumentsDebt instruments with maturity of one year or less. Under the PM Regulations they include commercial paper, trade bills, treasury bills, certificates of deposit and usance bills.
- Dealing teamThe team a portfolio manager must constitute to place and execute all orders under its written policies, working from a restricted dealing room with recorded lines and full audit trails.
- Disclosure DocumentThe document a portfolio manager must give every prospective client with the account opening form, before the agreement is signed, and keep on its website — setting out the manager, services, risks, fees and performance.
- Direct onboardingThe option portfolio managers must give clients to join a PMS directly, without a distributor. It must be prominently disclosed, and only statutory charges may be levied at direct onboarding.
- Empanelled valuation agencyA valuation agency approved by APMI from whose panel every portfolio manager must mandatorily source debt and money market security prices, though the manager still bears ultimate responsibility for fair valuation.