SEBI Overhauls $463B PMS Industry with Major Reforms
SEBI headquarters in Mumbai with market data overlays.
Key Highlights
SEBI transforms India’s $463B portfolio management services industry with sweeping reforms, enabling global investments and short selling.
The Securities and Board of India has implemented a landmark overhaul of the country’s $463 billion portfolio management services industry. These new regulations grant firms the authority to invest client funds globally and utilize advanced market tools.
Expanding Investment Horizons and Trading Tools
Under the updated framework, managers gain critical new capabilities for asset allocation and risk management. The regulatory changes specifically introduce the following permissions:
Investment in foreign equities, debt securities, overseas mutual funds, and real estate investment trusts.
Engagement in short selling of equity options and utilization of exchange-traded derivatives for enhanced hedging.
New Mutual Fund Category and Market Access
The regulatory updates extend far beyond the portfolio management sector to introduce fresh investment routes and broaden participation. The framework creates new avenues for both domestic investors and foreign market participants.
Introduction of the portfolio managers’ route for investing in mutual fund units, setting a minimum investment threshold of 2.5 million rupees.
Expansion of access for foreign portfolio investors to include non-agricultural commodity derivatives and physically settled contracts.
Simplification of the accreditation process for investors alongside revised settlement proceedings designed to reduce penalty gaps.
Authorization for real estate investment trusts and infrastructure investment trusts to issue depository receipts to foreign investors.