Citing ongoing market meltdown due to the coronavirus pandemic, securities brokerage company IndiaNivesh announced the closure of its Portfolio Management Services (PMS) business.
In an email to PMS investors dated March 29, IndiaNivesh’s Managing Director Sandeep Jain said, “In view of the current market volatility pursuant to the global outbreak of COVID-19 and its long term impact on our business, we have decided to close our operation at IndiaNivesh Investment Managers Pvt. Ltd., a SEBI registered portfolio manager. Thus our sole strategy of Sprout Portfolio will be wound up”.
He added that “consequently, all assets in our custody (securities, bank balance, etc.) shall be handed over” to clients. Jain added that clients had two options under which we could transfer assets to your designated bank account/Demat account.
According to the email to clients, Jain said that the first option would be the liquidation of all shares held in the strategy and transferring proceeds along with cash balance to the bank account. The second option will be to transfer shares to a Demat account (other than the one opened for PMS with IL&FS) and cash/liquid funds to the client’s bank account. However, the Client Master List (CMR) of the respective Demat account will be required for the transfer of shares.
Taking into account the ongoing nationwide lockdown, Jais also said that clients may have to face delay in the process of handing over shares and cash and closure of their PMS account.
Last year, Karvy and IL&FS Securities, two large brokerages and clearing firms had defaulted. However, more than 90 percent of Karvy’s investors had managed to receive their money back due to Sebi’s prompt action.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.