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Sebi Revamps PMS: New Avenues, MF-Only Option
24 Jul
Summary
- Sebi is revamping portfolio management services due to rapid industry growth.
- New proposals include overseas investments and a mutual fund-only PMS category.
- Minimum investment for MF-only PMS could drop to ₹25 lakh from ₹50 lakh.
The Securities and Exchange Board of India (Sebi) has proposed a substantial revamp of its portfolio management services (PMS) regulations, responding to the sector's rapid growth. Assets under management have surged to ₹42.61 lakh crore as of May 2026, a significant increase from ₹18.07 lakh crore in April 2019.
Key changes include enabling portfolio managers to invest in overseas securities, to-be-listed companies, and investment-grade unlisted debt. A new, simplified mutual fund-only PMS (MF-PMS) category is also planned, exclusively managing investments in direct mutual funds and ETFs.
For the MF-PMS category, Sebi suggests reducing the minimum investment threshold to ₹25 lakh from the current ₹50 lakh. Additionally, a cap of 2.5% of AUM on fixed management fees is proposed, alongside greater flexibility in using exchange-traded derivatives, with specific exposure limits.
Further proposed relaxations include permitting demat account portability and easing power of attorney requirements for clients. These reforms aim to cater to increasingly sophisticated investors and growing demand for personalized investment solutions.
