{"id":80091,"date":"2026-07-25T18:17:05","date_gmt":"2026-07-25T12:47:05","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=80091"},"modified":"2026-07-25T18:18:08","modified_gmt":"2026-07-25T12:48:08","slug":"sebi-pms-reforms","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/25-07-2026\/sebi-pms-reforms","title":{"rendered":"SEBI Proposes Comprehensive Reforms to Portfolio Management Services (PMS) Framework"},"content":{"rendered":"\n<p><strong>S<\/strong><strong>yllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Securities and Exchange Board of India (SEBI) has proposed a sweeping review of the SEBI (Portfolio Managers) Regulations, 2020, seeking to modernise the framework governing portfolio management services (PMS).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What\u2019s a Portfolio Management Service (PMS)?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Portfolio management service (PMS) is registered under the <strong>SEBI (Portfolio Managers) Regulations, 2020.\u00a0<\/strong><\/li>\n\n\n\n<li>It is a professional investment service where a qualified fund manager takes charge of the equity, debt and other securities portfolio of a customer, who is a high net-worth individual.\u00a0<\/li>\n\n\n\n<li>Only corporate entities, companies or LLPs with SEBI registration can legally offer these services in India. SEBI mandates that no PMS provider can accept less than <strong>Rs 50 lakh per client.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Need for the Proposed Framework<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The proposal comes against the backdrop of a rapid expansion in the PMS industry and changing investor preferences.\u00a0<\/li>\n\n\n\n<li>According to SEBI, assets managed by portfolio managers have more than doubled over the past six years, prompting the need for a fresh regulatory framework.<\/li>\n\n\n\n<li>The assets under management (AUM) of the PMS industry reached Rs 42.61 lakh crore as on May 2026 from Rs 18.07 lakh crore in 2019.\n<ul class=\"wp-block-list\">\n<li>The total number of clients as of May 2026 stood at 2.19 lakh from 1.5 lakh in 2019.\u00a0<\/li>\n\n\n\n<li>The number of portfolio managers has more than doubled from 226 in 2020 to 515 as of May 2026.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Proposals of SEBI<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>PMS managers will have to obtain a separate registration as a MF-PMS.<\/li>\n\n\n\n<li>The minimum investment would be reduced to <strong>Rs 25 lakh,<\/strong> potentially opening the door to a much wider base of affluent investors. Traditional PMS products require a minimum investment of <strong>Rs 50 lakh.<\/strong><\/li>\n\n\n\n<li>SEBI has proposed a lower net worth requirement of <strong>Rs 2 crore<\/strong>, compared with <strong>Rs 5 crore <\/strong>for traditional PMS, along with simplified qualification requirements for principal officers and optional dealing room and staffing requirements.<\/li>\n\n\n\n<li>SEBI has proposed capping the fixed management fee at <strong>2.5 percent<\/strong> of the client&#8217;s assets under management (AUM). Portfolio managers may also charge performance-linked fees or a combination of fixed and performance-based fees, but only with the explicit consent of the client.<\/li>\n\n\n\n<li>If an entity is both a mutual fund distributor and an MF-PMS provider, it must maintain an arm&#8217;s-length relationship between the two businesses through separate divisions.\n<ul class=\"wp-block-list\">\n<li>The same client cannot be offered both mutual fund distribution services and MF-PMS by the same entity.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Unlike conventional PMS, where portfolio managers invest directly in stocks, bonds and other securities, the proposed MF-PMS would be restricted to investing only in direct plans of <strong>mutual fund schemes, Exchange Traded Funds (ETFs) and Specialised Investment Funds (SIFs).<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Significance of the Proposed Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Expands Investment Opportunities:<\/strong> Allows portfolio managers to diversify investments across a wider range of domestic and international assets.<\/li>\n\n\n\n<li><strong>Improves Ease of Doing Business:<\/strong> Simplifies compliance requirements and lowers operational barriers for portfolio managers.<\/li>\n\n\n\n<li><strong>Promotes Financial Innovation: <\/strong>Introduces new investment structures, such as the Mutual Fund-based PMS and Independent Fund Manager Platform.<\/li>\n\n\n\n<li><strong>Aligns with Global Best Practices: <\/strong>Modernises the PMS regulatory framework in line with evolving international investment management standards.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/sebi-pms-rules-overhaul-explained-10801795\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> The Securities and Exchange Board of India (SEBI) has proposed a sweeping review of the SEBI (Portfolio Managers) Regulations, 2020, seeking to modernise the framework governing portfolio management services (PMS). <\/li>\n<p><\/p>\n<p><strong> What\u2019s a portfolio management service (PMS)? <\/strong><\/p>\n<li class=\"ms-5\"> Portfolio management service (PMS) is registered under the SEBI (Portfolio Managers) Regulations, 2020.\u00a0 <\/li>\n<li class=\"ms-5\"> It is a professional investment service where a qualified fund manager takes charge of the equity, debt and other securities portfolio of a customer, who is a high net-worth individual.\u00a0 <\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/25-07-2026\/sebi-pms-reforms \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-80091","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=80091"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80091\/revisions"}],"predecessor-version":[{"id":80094,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/80091\/revisions\/80094"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=80091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=80091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=80091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}