SEBI Overhauls PMS Rules to Expand Investor Access

The Securities and Exchange Board of India has introduced significant regulatory reforms to overhaul the Portfolio Management Services framework. These updates focus on reducing operational friction while expanding access for foreign and sophisticated domestic investors.

Streamlining Entry and Investment Thresholds

The updated framework adjusts investment thresholds to make products accessible to a broader range of high-net-worth individuals. SEBI has also streamlined the registration and compliance processes specifically for foreign entities to attract more international capital into Indian markets.

Key adjustments in the new regulatory framework include:

• Adjusted investment thresholds for high-net-worth individuals to broaden accessibility.

• Streamlined registration processes designed to attract international capital.

• Simplified compliance rules for foreign entities operating within the system.

Modernizing the Settlement Framework

Alongside access changes, the regulator has overhauled the settlement framework to boost overall market efficiency. Faster and more flexible mechanisms have been introduced to lower counterparty risk and drive market liquidity.

Core components of the settlement updates include:

• Faster settlement mechanisms to enhance operational efficiency.

• Flexible structures aimed at reducing counterparty risk across transactions.

• Measures intended to improve overall market liquidity for participants.

These collective updates reflect an ongoing regulatory commitment to fostering a transparent and investor-friendly financial ecosystem in India.