In a significant move that could reshape the landscape of India's financial markets, the Securities and Exchange Board of India (SEBI) has introduced a revised framework for Portfolio Management Services (PMS). This initiative, which includes the launch of a new Performance Reporting and Investment Management (PRIM) system, aims to broaden the reach of PMS by lowering the minimum investment threshold to ₹25 lakh, a change that industry leaders believe could potentially double the size of the PMS sector over time. Vikas Khemani, the Chairman of the Association of Portfolio Managers of India (APMI), expressed optimism about the new framework during a press conference held in Mumbai on September 26, 2026.
Khemani emphasized that the revised framework not only lowers the entry barrier for retail investors but also significantly expands the range of investment options available. The introduction of PRIM is expected to enhance transparency and accountability in PMS offerings, allowing investors to track their investments more effectively. This move comes at a time when the demand for personalized investment strategies is on the rise, particularly among high-net-worth individuals (HNWIs) seeking tailored financial solutions.
The PMS industry in India has historically been dominated by a select few players, but with the new regulations, Khemani anticipates a surge in the number of independent fund managers entering the market. This influx is likely to foster competition, leading to improved services and innovative investment strategies that cater to a wider audience. Furthermore, the emphasis on global diversification and the inclusion of derivatives in PMS offerings reflects a growing trend among investors to seek out alternative investment avenues that can provide better risk-adjusted returns.
As the Indian economy continues to evolve, the role of PMS in wealth management is becoming increasingly critical. Khemani pointed out that the new framework aligns with global best practices, positioning India as an attractive destination for both domestic and international investors. The potential for doubling the PMS industry size is not merely a projection; it is a reflection of the changing dynamics of investor preferences, which are increasingly leaning towards more sophisticated and diverse investment strategies.
The lower entry threshold of ₹25 lakh is particularly noteworthy, as it opens the door for a larger segment of the population to access professional portfolio management services. This democratization of investment management is expected to lead to a significant increase in the number of retail investors participating in the PMS market. Khemani noted that the revised framework would also encourage financial literacy among investors, as they become more engaged in understanding the intricacies of portfolio management.
Moreover, the introduction of performance-based metrics under the PRIM system is set to enhance the accountability of portfolio managers. Investors will be better equipped to evaluate the performance of their investments, enabling them to make informed decisions. This shift towards a more transparent and performance-driven approach is anticipated to build trust between investors and fund managers, thereby fostering a healthier investment ecosystem.
In conclusion, SEBI's new PMS framework is a landmark development that promises to transform the investment landscape in India. As the industry adapts to these changes, the focus on global diversification, derivatives, and independent fund managers will likely redefine how investors approach wealth management. With the potential to double the size of the PMS sector, the future looks promising for both investors and portfolio managers alike.