Archive · 25 Sep 2026
SEBI Approves Reforms, Expands PMS and FPI Access
SEBI is the regulator that oversees India’s securities markets.
It approved new rules for companies that manage money for clients.
These companies can now invest in more options, including IPOs, new debt offerings and some foreign investments.
They can also invest in direct mutual fund plans if the investment meets the required minimum.
With permission, they may place up to 10% of a client’s money in certain unlisted debt securities.
Foreign investors can participate in more non-agricultural commodity derivatives.
They must close certain positions before the contract reaches its Tender Period, which starts three days before expiry.
SEBI also changed rules for investment trusts, settlements, advertisements, research analysts and vault managers.
SEBI approved the 2026 Portfolio Managers Regulations, replacing the 2020 framework and reducing its length from 70 to 33 pages.
Portfolio managers may invest in IPOs, primary debt issuances, wider overseas assets and direct mutual fund plans through the PRIM route.
Discretionary portfolio managers may invest up to 10% of client AUM in eligible unlisted debt securities with client consent, while derivatives exposure may reach 1.25 times AUM.
FPIs received broader access to non-agricultural commodity derivatives but must exit non-cash-settled positions before the Tender Period begins three days before expiry.
SEBI also approved reforms for REITs, InvITs, accredited investors, settlement procedures, advertisements, research analysts and vault managers.
- Who
- The Securities and Exchange Board of India, portfolio managers, foreign portfolio investors and other securities-market participants.
- What
- SEBI approved new portfolio-management regulations and a package of reforms expanding investment access and changing rules across several market segments.
- When
- Thursday, September 24, according to the reports; the new portfolio-management regulations are titled the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026.
- Where
- India’s securities, commodity-derivatives, investment-trust and related financial markets.
- Why
- SEBI said the reforms aim to deepen market participation, widen investment opportunities, simplify compliance and improve ease of doing business.
- PMS framework
- The 2026 regulations replace the 2020 framework and reduce its length from 70 pages to 33 pages; the reports also say the word count fell by about 42%.
- Permitted investments
- Portfolio managers may invest in IPOs, primary debt issuances, overseas listed equity and debt, REITs, overseas mutual funds, ETFs, index funds and foreign government securities, subject to applicable rules.
- PRIM route
- Portfolio managers may invest in direct Indian mutual fund plans, including ETFs, index funds and Specialised Investment Funds, with a minimum investment threshold of Rs 25 lakh.
- Unlisted debt
- Discretionary portfolio managers may invest up to 10% of client AUM in investment-grade, unlisted non-convertible debt securities with client consent.
- Derivatives exposure
- Exchange-traded derivatives exposure for portfolio managers may reach 1.25 times a client’s AUM.
- FPI safeguards
- FPIs may participate in non-agricultural commodity derivatives, including eligible physically or non-cash-settled contracts, but must exit relevant positions before the Tender Period begins three days before expiry and cannot increase positions from T-3.
- Other reforms
- SEBI approved overseas depository receipts for REITs and publicly listed InvITs, expanded accredited-investor thresholds, created faster settlement routes, and raised vault managers’ minimum net worth from Rs 50 crore to Rs 75 crore.
