Archive · 25 Jul 2026
SEBI Proposes New MF-Only PMS Framework
SEBI has proposed a new framework called MF-PMS, which stands for Mutual Fund-only Portfolio Management Services.
This framework aims to make it easier for more people to invest in professionally managed mutual fund portfolios.
Currently, portfolio managers can invest in a variety of securities, but under this new proposal, they would only invest in mutual funds, ETFs, and Specialised Investment Funds.
The entry point for investors is set at ₹25 lakh, which is lower than the current ₹50 lakh required for traditional PMS.
The management fee is capped at 2.5% of the assets under management, and performance fees are allowed with client consent.
This proposal is seen as a major structural reform that could broaden access to portfolio management and encourage more boutique advisory firms to enter the market.
It is expected to bridge the gap between conventional mutual fund investing and traditional PMS offerings, providing investors with customized mutual fund portfolios at a lower entry threshold.
SEBI proposes a new MF-PMS framework to make professionally managed mutual fund portfolios accessible to more investors.
The minimum investment requirement is set at ₹25 lakh, lower than the current ₹50 lakh for traditional PMS.
Management fees are capped at 2.5% of assets under management, with performance fees allowed with client consent.
The framework simplifies eligibility norms and disclosure requirements, reducing regulatory burdens.
Mutual fund distributors can operate an MF-PMS business, subject to strict segregation and conflict prevention measures.
- Who
- The Securities and Exchange Board of India (SEBI)
- What
- Proposed a new Mutual Fund-only Portfolio Management Services (MF-PMS) framework
- When
- Consultation paper released on July 23
- Where
- India
- Why
- To make professionally managed mutual fund portfolios accessible to a larger pool of investors and create new business opportunities for portfolio managers, registered investment advisers (RIAs), and mutual fund distributors (MFDs)
Proponents of the MF-PMS Framework
Critics of the MF-PMS Framework
Accessibility
Proponents of the MF-PMS Framework
Proponents argue that the lower entry barrier of ₹25 lakh will make professionally managed mutual fund portfolios accessible to a larger pool of investors, including mass-affluent individuals.
Critics of the MF-PMS Framework
Critics may argue that the ₹25 lakh entry point is still too high for many retail investors, limiting the framework's inclusivity.
Regulatory Simplification
Proponents of the MF-PMS Framework
Supporters believe the simplified eligibility norms and disclosure requirements will reduce regulatory burdens, encouraging more boutique advisory firms to enter the market.
Critics of the MF-PMS Framework
Critics might express concerns that relaxed regulations could lead to lower standards of professionalism and investor protection.
Fee Structure
Proponents of the MF-PMS Framework
Proponents see the capped management fee of 2.5% and the option for performance fees as fair and competitive, aligning with market standards.
Critics of the MF-PMS Framework
Critics may argue that the fee structure could still be too high for some investors, especially those with smaller portfolios.
- Minimum Investment
- ₹25 lakh per client
- Minimum Net Worth
- ₹2 crore for MF-PMS applicants
- Management Fee Cap
- 2.5% of assets under management (AUM)
- Eligible Investments
- Direct mutual funds, ETFs, and Specialised Investment Funds (SIFs)
- Principal Officer Requirements
- Relaxed qualification and certification norms
- Exit Load Provisions
- Not applicable, preventing double charging for investors
- Target Investors
- Mass-affluent investors