1 month ago
SEBI Proposes MF-Only PMS with ₹25 Lakh Entry
SEBI has proposed a new type of investment service called MF-only PMS, which allows people with at least ₹25 lakh to invest to get professional help managing their money.
This is different from traditional PMS, which requires at least ₹50 lakh.
The new service focuses only on mutual funds, ETFs, and Specialized Investment Funds.
It aims to make investing easier by letting professionals handle the complex tasks of choosing funds and managing the portfolio.
This could help many Indians who have saved a good amount but don't qualify for traditional PMS.
The new rules also make costs clearer and eliminate some extra fees.
SEBI proposes MF-only PMS with a minimum investment of ₹25 lakh.
Traditional PMS requires ₹50 lakh and offers a broader investment universe.
MF-only PMS restricts investments to direct plans of mutual funds, ETFs, and Specialized Investment Funds.
Professional managers in MF-only PMS have full responsibility for portfolio performance.
The proposal aims to improve transparency and eliminate distributor commissions.
- Who
- SEBI, investors with ₹25 lakh to ₹50 lakh investable surplus
- What
- Proposal for MF-only PMS with a lower entry point
- Where
- India
- When
- 23 July
- Why
- To provide regulated structure for professional portfolio management and simplify investment decisions for investors
Traditional PMS
MF-Only PMS
Investment Universe
Traditional PMS
Allows investment across listed equities, debt securities, mutual funds, ETFs, and potentially unlisted and foreign securities.
MF-Only PMS
Restricted to direct plans of mutual funds, ETFs, and Specialized Investment Funds.
Management Responsibility
Traditional PMS
Investors may use advisory services where they retain responsibility for execution and monitoring.
MF-Only PMS
Operates under a discretionary mandate where the manager is fully responsible for portfolio performance.
Cost Structure
Traditional PMS
Costs may include distributor commissions and other fees.
MF-Only PMS
Eliminates distributor commissions and caps management fees at 2.5% of AUM, with transparent fee structures.
Key facts
- Minimum Investment Requirement
- ₹25 lakh
- Proposed by
- SEBI
- Date of Proposal
- 23 July
- Investment Universe
- Direct plans of mutual funds, ETFs, and Specialized Investment Funds
- Management Fee Cap
- 2.5% of AUM
- Potential Beneficiaries
- 1.5 crore to 2 crore Indian citizens with investable surpluses between ₹25 lakh and ₹50 lakh
Quotes
Sandeep Jethwani
Co-founder, Dezerv
“Mutual funds were originally conceived to simplify the complexity of individual stock selection, yet today’s landscape features roughly 2,000 schemes against a backdrop of just 500 investable stocks,”
livemint.com
“It is not clear what gap it serves because MF-PMS is already possible through the regular PMS route…the question is what incremental value do they add over what they are already able to do.”
thehindubusinessline.com
