PMS Investment size increased by SEBI

Published: January 22, 2020

The regulator of the securities market in India, Securities and Exchange Board of India (SEBI) had tightened disclosure norms on loan defaults and has increased the minimum investment limit by clients in a Portfolio Management Service (PMS) to Rs 50 lakh, from the earlier limit of Rs 25 lakh. The base net worth requirement of portfolio managers has raised to Rs 5 crore from the earlier Rs 2 crore. SEBI also directed that more than 25 percent of the Portfolio Manager’s assets under management (AUM) cannot be invested in unlisted securities.

The Government has recently released a gazette notification, with these directions of SEBI, which were released in November 2019. The existing Portfolio Managers are given three years’ time to meet the revised norms. Many brokers have increased selling PMS products as it allows the asset manager to follow more liberal selling practices and fund management making it easier in terms of tightly regulated mutual funds.

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