SEBI Overhauls PMS Rules: Lower Investment, More Access
By Business Desk
SEBI proposes major PMS regulation changes in India, aiming to lower investment minimums and net worth requirements, enhancing accessibility for investors.
The Securities and Exchange Board of India (SEBI) released a consultation paper on July 23, 2026, proposing a comprehensive review of its Portfolio Managers Regulations, 2020. This significant overhaul targets various investment vehicles and aims to reshape the landscape of Portfolio Management Services (PMS).
Understanding SEBI’s Proposed Regulatory Review
SEBI’s proposed changes extend to mutual fund schemes, exchange-traded funds (ETFs), and Specialised Investment Funds (SIFs). The review also addresses investment limits currently applicable to portfolio managers across the board.
Introducing a Mutual Fund-Only PMS Framework
A central proposal in the paper outlines a dedicated framework specifically for mutual fund-only PMS. This new structure is designed to make portfolio management more accessible to a broader range of investors and applicants.
- The minimum client investment requirement is proposed to decrease from ₹50 lakh to ₹25 lakh.
- For applicants, the minimum net worth requirement would be reduced from ₹5 crore to ₹2 crore.
Expanding Investment Flexibility for Portfolio Managers
The consultation paper also suggests granting portfolio managers greater flexibility in their investment choices. This expansion could broaden the scope of available assets for clients.
- Portfolio managers may be permitted to invest in overseas listed equity and debt securities.
- Investment in to-be-listed securities is also on the table for consideration.
Furthermore, discretionary PMS providers could gain the ability to allocate a portion of their client’s Assets Under Management (AUM) into specific unlisted debt. This would allow investments of up to 10% of a client’s AUM in investment-grade unlisted debt securities.
Growth Trajectory of the PMS Industry
These proposed changes arrive as the Portfolio Management Services industry has demonstrated robust expansion. The sector has seen significant increases in both managed assets and the number of active participants.
- Assets Under Management (AUM) reached ₹42.61 lakh crore as of May 31, 2026.
- The total number of portfolio managers operating in the market has grown to 515.
SEBI’s proposals aim to adapt regulations to this evolving market, potentially fostering further growth and streamlining operations for both investors and managers.