SEBI Proposes Overhaul of Portfolio Management Services Norms

The Securities and Exchange Board of India (SEBI) released a consultation paper on 23 July 2026 for a comprehensive review of the SEBI (Portfolio Managers) Regulations, 2020. The proposal covers Portfolio Management Services (PMS), mutual fund schemes, exchange-traded funds (ETFs), Specialised Investment Funds (SIFs), and investment limits for portfolio managers.

Portfolio Management Services in India

Portfolio Management Services are professional investment services offered to clients with higher investible funds. In India, PMS is regulated by SEBI under the SEBI (Portfolio Managers) Regulations, 2020. PMS providers may offer discretionary, non-discretionary, or advisory services depending on the mandate agreed with the client.

Key Proposed Regulatory Changes

SEBI has proposed a dedicated mutual fund-only PMS framework. Under this category, portfolio managers may manage client funds only through direct plans of mutual fund schemes, including ETFs and SIFs. The minimum client investment requirement for this category is proposed to fall from ₹50 lakh to ₹25 lakh, and the minimum net worth for applicants is proposed to fall from ₹5 crore to ₹2 crore. The consultation paper also proposes wider investment flexibility for portfolio managers. The proposed changes include investment in overseas listed equity and debt securities, as well as to-be-listed securities. Portfolio managers offering Discretionary Portfolio Management Services may also be allowed to invest up to 10% of a client’s Assets Under Management in investment-grade unlisted debt securities.

Industry Size and Regulatory Context

The PMS industry recorded Assets Under Management of ₹42.61 lakh crore as of 31 May 2026. This was higher than ₹18.07 lakh crore in April 2019. The number of portfolio managers increased from 226 in 2020 to 515 as of 31 May 2026.

Important Facts for Exams

• SEBI stands for the Securities and Exchange Board of India, which regulates the securities market in India.
• Portfolio Management Services are governed by the SEBI (Portfolio Managers) Regulations, 2020.
• ETFs are exchange-traded funds that are listed and traded on stock exchanges like shares.
• SIFs stands for Specialised Investment Funds, a category used in India’s fund management framework.

Exam-Relevant Points

The consultation paper is a regulatory document used to seek public comments before final amendments are made. The proposed changes relate to client eligibility, capital requirements, investment scope, and fee structure in the PMS segment.