3 days ago
SEBI’s New PMS Rules Broaden Access and Investment Choices
SEBI has changed the rules for professionally managed investment portfolios.
One new route will let people invest through a portfolio manager with ₹25 lakh instead of ₹50 lakh.
This may allow more mass-affluent investors to use professional help.
Managers can choose direct mutual funds, ETFs, index funds and some other investments.
Investors who meet the ₹50 lakh requirement can access an even wider range of assets.
These may include overseas investments, debt, REITs, InvITs and derivatives used for hedging.
The new system lets managers focus on building a complete portfolio instead of only choosing stocks.
Experts expect investors to compare wealth managers more closely based on their performance and methods.
SEBI has reduced the minimum investment for the new mutual fund portfolio management route from ₹50 lakh to ₹25 lakh.
The framework allows managers to construct portfolios using mutual funds, ETFs, index funds and other permitted instruments.
PMS portfolios for investors meeting the ₹50 lakh threshold can include global assets, debt, REITs, InvITs and derivatives for hedging.
The MFPMS, also referred to as the PRIM framework, allows professional management of direct mutual fund schemes, ETFs and SIFs.
Industry participants say the changes could attract more mass-affluent investors and increase competition among wealth managers.
- Who
- The Securities and Exchange Board of India (SEBI), portfolio managers, and investors; industry views were provided by Shobhit Mathur and Mohit Gang.
- What
- SEBI has revised Portfolio Management Services rules, lowering the threshold for a new mutual fund portfolio management route and expanding permissible investments.
- Where
- The changes apply to the Indian Portfolio Management Services market.
- When
- The articles discuss SEBI’s revised framework but do not specify an implementation date.
- Why
- The framework is intended to provide greater flexibility in asset allocation and broaden access to professionally managed portfolios.
Key facts
- New route minimum investment
- ₹25 lakh
- Existing PMS threshold referenced
- ₹50 lakh
- Fee cap under the new framework
- 1% of assets under management
- Permitted mutual-fund-route assets
- Direct mutual fund schemes, ETFs and SIFs
- Expanded PMS assets
- Global investments, listed and unlisted investment-grade debt, REITs, InvITs and derivatives for hedging
- Additional investment opportunity
- PMSs may invest in IPOs, including debt IPOs
- Framework names
- MFPMS and PRIM framework
Quotes
Shobhit Mathur
Co-Founder of Ionic Wealth and a commentator on the revised PMS framework
“This is like taking a portfolio manager's route to investing in mutual funds.”
CNBC TV 18
“Asset allocation is the biggest reason for people to deliver strong returns.”
CNBC TV 18
Sources
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