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Area
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2020 Regulations
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2026 Regulations
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Status and structure
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SEBI (Portfolio Managers) Regulations, 2020
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In force from 1 April 2027; the 2020 regulations are repealed (Regulation 46). It has ten chapters; the redundant and transitory clauses have been removed; a savings clause safeguards past actions.
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Minimum client investment
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₹50 lakh per client
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Retained (as provided in Regulation 16(3)); accredited investors are exempt (in accordance with Regulation 16(4)); existing accounts which are below the floor level are given a period of 12 months (under Regulation 16(5)); renewal involves making a fresh investment (as stated in Regulation 16(6)).
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Net worth and liquidity
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₹5 crore net worth
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₹5 crore are retained, 10% of which consists of unencumbered liquid assets, including units of liquid and overnight funds; existing managers have 12 months (as per Regulation 4(a)(iv)).
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Mutual fund only PMS
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No separate route
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Under Chapter VI: ticket amount is ₹25 lakh, net worth is ₹2 crore and only direct plans are allowed. Note that there is a 1% fee cap and a 25% cap on group-AMC schemes.
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IPOs and primary debt
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Regulation 24(3) did not specifically allow investments to be listed.
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The IPOs are expressly allowed under Regulation 17(1)(b) for equity and for the primary-market issuance of debt.
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Foreign securities
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Not permitted for client funds
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Under Regulation 17(1)(c): discretionary and non-discretionary services, as specified by the Board. Note: subject to FEMA/LRS limits and with explicit client consent.
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Unlisted securities
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Non-discretionary and advisory up to 25% of AUM; discretionary prohibited
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Under regulation 17(1)(d), all three can be included within the board's limits. With consent, a discretionary amount up to 10% may be allocated to investment-grade unlisted debt. For large-value accredited investors, the amount can be up to 100% (as specified in regulation 17(1)(f)).
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Exchange-traded derivatives
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Hedging and portfolio rebalancing
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Under Regulation 17(1)(e): the wider use may be made within the Board's limits. The proposal for consultation is that total exposure should not exceed 1.25 times the AUM, unhedged short positions should not exceed 50% through the use of equity derivatives, and option premiums should not exceed 10%, on the condition that explicit consent is given.
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Eligible fund managers
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Recognised since 2017 but could not handle foreign securities
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Chapter III covers funds that invest in both Indian and foreign securities; in the case of funds involving foreign securities, only Chapters I to III and Regulation 16(2) are applicable.
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Independent fund managers
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Not recognised
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It is defined (Reg. 2(1)(n)); it follows the same qualification standard as the principal officer (Reg. 4(b)(iii)); the manager remains accountable to the clients.
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Dealing room
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Mandatory
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For certain managers (as specified in Reg. 4(a)(ii)(h)). Memo: If the AUM is below ₹100 crore, the client count test is omitted and it takes 90 days to set up once the threshold is crossed.
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Principal officer
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Graduates not eligible on their own, per reports of the Board decision
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Under section 4(b)(i): a graduate with a CFA, CA, CS, or CMA designation, together with NISM certification and five years' experience (including two years in portfolio management, advisory, or fund management).
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Disclosure Document
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Changes to be filed within 7 working days (per memo)
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For regulation 15(2): the digital version is provided, a physical copy can be obtained on request, an annual update is issued within six months and an addendum is prepared within 15 calendar days of a material change.
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Power of attorney
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Separate PoA taken besides the client agreement
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The authorisations are included in the agreement (in the Third Schedule); the PoA remains in effect only if the RBI or another regulator requires it.
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Demat portability
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New demat account on change of manager or custodian
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The regulations don't mention it; the Board has approved the construction of a pathway together with depositories and custodians.
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Legacy prudential limits
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12 months to comply (per memo)
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36 months (Reg. 17(1)(l)).
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Registration housekeeping
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No express surrender or commencement clause (per memo)
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The certificate is to be surrendered (as per Regulation 8) and the business must start within three years (under Regulation 6(vii)).
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