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Sebi proposes changes to India’s portfolio management rules
The consultation would cut minimum MF-only PMS investment to ₹250,000 and allow overseas securities, as PMS AUM rose to ₹42.6 trillion by May 2026.
Sebi has issued a consultation paper proposing a revamp of India’s portfolio management regulations, aiming to broaden investment options, ease compliance, and simplify the regulatory framework for portfolio management services firms, LiveMint reported.
The proposals include creating an MF-only PMS framework, under which portfolio managers would manage investments only through direct plans of mutual fund schemes, including exchange-traded funds and specialised investment funds. Under the MF-PMS model, the minimum investment requirement would be reduced to ₹250,000 from ₹500,000.
Sebi also outlined changes for discretionary PMS, including allowing managers to invest in “to-be-listed” securities and placing a cap of up to 10% of a client’s AUM in investment-grade unlisted debt securities. In addition, the regulator said it would allow PMS managers to invest client money in overseas securities, including listed equities, listed debt securities, and overseas mutual funds.
According to LiveMint, portfolio management AUM has more than doubled to ₹42.61 trillion as of May 2026, versus April 2019, while the number of clients increased to 2.1 million from 1.5 million. The consultation said the review is necessary for PMS regulations to keep pace with industry growth, despite PMS expanding at a slower pace than the regulator had expected.