Now Reading: Sebi notifies PMS rules, allows IPO and overseas investments
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Sebi notifies PMS rules, allows IPO and overseas investments
Markets regulator Sebi has notified a new portfolio management services (PMS) framework that will take effect from 1 April 2027. Portfolio managers can now invest in IPOs, primary market debt issuances, a wider set of overseas securities, and unlisted securities. A new Portfolio Managers Route for Investing in Mutual Fund units (PRIM) allows portfolio managers to invest client funds in direct plans of mutual funds, including ETFs and index funds, with a minimum investment of Rs 25 lakh.
The framework introduces Independent Fund Managers who can manage client portfolios in association with registered portfolio managers, with the registered entity retaining responsibility. Sebi has also relaxed educational qualifications for principal officers, making graduates eligible. Entities offering only PRIM services must maintain a minimum net worth of Rs 2 crore. The notification follows a Sebi board clearance in September.
Indian Opinion Analysis
The new PMS framework lets portfolio managers put client money into IPOs, primary debt, and more overseas securities for the first time. It also creates a dedicated route for investing in mutual fund direct plans, which typically have lower expense ratios. Large investors can get advisory services for unlisted securities. The minimum Rs 25 lakh threshold for the PRIM route and the Rs 2 crore net worth requirement for exclusive PRIM firms will limit access to wealthier clients. The relaxation of qualification rules for principal officers may lower compliance costs for smaller firms. The rules take effect on 1 April 2027, giving the industry nearly six months to prepare.
Source: economictimes.indiatimes.com
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