Securities and Exchange Board of India (Sebi) notifies new Portfolio Management Services framework with wider investment avenues and PRIM route

Key facts

• The Securities and Exchange Board of India (Sebi) notified the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replacing the 2020 framework, effective from April 1, 2027.
• The new Portfolio Management Services (PMS) framework allows portfolio managers to invest in IPOs, primary market debt issuances, listed securities, money market instruments, mutual funds, foreign securities, unlisted securities and exchange-traded derivative instruments.
• Portfolio managers may offer discretionary, non-discretionary or advisory services for investment up to hundred per cent of assets under management of large value accredited investors in unlisted securities, subject to disclosures and agreed terms.
• Sebi introduced the Portfolio Managers Route for Investing in Mutual Fund units (PRIM) to invest clients' funds in direct plans of mutual funds, including ETFs, Index Funds and Specialised Investment Funds of Indian AMCs, with a minimum investment threshold of Rs 25 lakh.
• Entities exclusively offering PRIM must maintain a minimum net worth of Rs 2 crore.
• Sebi introduced the concept of Independent Fund Managers, who can manage client portfolios in association with registered portfolio managers, with the registered portfolio manager retaining responsibility and liability.
• Sebi relaxed the educational qualification for principal officers, making graduates eligible to function as principal officer.
• The notification follows the Sebi board's clearance of the proposal in September.