Archive · 24 Sep 2026
SEBI Rewrites PMS Rules, Launches ₹25 Lakh Mutual Fund Route
SEBI is India’s securities-market regulator.
It approved new rules for companies that manage investment portfolios for clients.
The new PRIM option lets these managers build portfolios using direct plans of mutual funds, ETFs, index funds and specialised investment funds.
Investors need at least ₹25 lakh to use this route.
The manager’s fixed fee can be no more than 1% of the investor’s money, although performance-based fees are also allowed.
Portfolio managers can also invest some money in certain unlisted debt, overseas securities and exchange-traded derivatives under set limits.
SEBI created Independent Fund Managers who can work with registered portfolio managers, but the registered manager remains responsible.
The regulator also changed rules for REITs, InvITs, alternative investment funds and other market participants.
SEBI said the shorter rulebook should make compliance clearer and easier.
SEBI approved the Portfolio Managers Regulations, 2026, replacing the 2020 framework.
The new PRIM route lets portfolio managers invest in direct mutual fund plans, including ETFs, index funds and SIFs.
PRIM requires a minimum investment of ₹25 lakh, a portfolio-manager net worth of ₹2 crore and fixed fees capped at 1% of AUM.
Discretionary portfolio managers may invest up to 10% of client AUM in eligible unlisted debt and use exchange-traded derivatives up to 1.25 times AUM.
SEBI also permitted overseas securities investments, introduced Independent Fund Managers and reformed REITs, InvITs, AIFs and other market rules.
- Who
- The Securities and Exchange Board of India (SEBI), portfolio managers and investors.
- What
- SEBI approved the Portfolio Managers Regulations, 2026, including the PRIM mutual-fund investment route and broader investment and regulatory reforms.
- When
- The reforms were approved at SEBI’s meeting on Thursday and reported on September 24, 2026.
- Where
- India’s securities and investment markets; SEBI’s meeting was held in Mumbai.
- Why
- To expand investment choices, improve investor protections, broaden access to professionally managed portfolios and simplify compliance.
- New PMS framework
- The Portfolio Managers Regulations, 2026 replace the 2020 regulations.
- PRIM investment threshold
- Investors must commit at least ₹25 lakh to use the Portfolio Managers Route for Investing in Mutual Fund Units.
- Eligible PRIM products
- PRIM portfolios may use direct plans of mutual funds, ETFs, index funds and specialised investment funds offered by Indian asset management companies.
- PRIM fee limit
- Fixed management fees are capped at 1% of client AUM; performance-linked fees are also permitted.
- Portfolio manager net worth
- The minimum net-worth requirement is ₹2 crore.
- Unlisted debt limit
- Discretionary portfolio managers may invest up to 10% of client AUM in investment-grade, non-convertible unlisted debt, subject to client consent.
- Derivatives exposure
- Exchange-traded derivatives exposure may reach up to 1.25 times client AUM.
- Rulebook simplification
- The revised PMS regulations were reduced from 70 pages to 33, while provisos fell from 47 to four.
