Listen to this article in summarized format
The regulator said the review has been done due the rapid expansion of the PMS industry, where AUM (assets under management) has multiplied to ₹42.61 lakh crore as of May 2026 from ₹18.07 lakh crore in April 2019. "Considering the increasing sophistication of investors, growing demand for more personalised solutions and diverse investment portfolio, a need was felt to review the PM (portfolio manager) Regulations," Sebi said in a discussion paper on Thursday.
The regulator has proposed allowing portfolio managers to invest client funds in to-be-listed securities, investment-grade unlisted debt and overseas securities, while also creating a simplified mutual fund-only PMS (MF-PMS).
Read more: North India leads India's expanding stock market investor base
It has proposed the introduction of a dedicated MF-PMS category, under which portfolio managers would exclusively manage investments in direct mutual fund schemes, exchange-traded funds and specialised investment funds. The regulator has proposed reducing the minimum investment threshold for this category to ₹25 lakh from the current PMS requirement of ₹50 lakh and lowering the minimum net worth requirement for applicants to ₹2 crore from ₹5 crore.
Sebi has also proposed giving portfolio managers greater flexibility to use exchange-traded derivatives. Total derivatives exposure would be capped at 1.25 times a client's AUM, while unhedged short exposure through equity derivatives would be 50% of AUM, subject to explicit client approval. It has also proposed allowing smaller portfolio managers with fewer than 10 clients or AUM below ₹100 crore to operate without a dedicated dealing room.
The regulator has also proposed permitting demat account portability, relaxing the requirement to obtain powers of attorney from clients, allowing independent fund managers to operate under registered portfolio managers.
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price