SEBI’s new PMS framework could potentially double industry size over time: APMI Chairman Vikas Khemani
SEBI’s revised PMS framework introduces PRIM, expands investment options and lowers the entry threshold to ₹25 lakh. Industry leaders expect these changes to broaden PMS adoption, while global diversification, derivatives, independent fund managers and risk-adjusted performance gain importance for investors.
India's portfolio management industry could see a substantial growth trajectory following SEBI's recent updates to the PMS framework. Known as PRIM, or Portfolio Management Services Investment Route, the new system broadens investment options for managers while reducing the entry threshold to ₹25 lakh. Vikas Khemani, Chairman of the Association of Portfolio Managers in India (APMI), predicts that these changes could potentially double the size of the PMS industry over time.
Khemani highlights the flexibility offered by the new framework, allowing managers to incorporate a wider range of investment vehicles such as direct mutual fund plans, ETFs, index funds, and SIFs into custom portfolios. This integration enables investors to access professional portfolio management at a more accessible entry point. Additionally, the framework encourages global diversification and the use of derivatives, broadening the potential sources of returns and risk management strategies.
The introduction of the Independent Fund Manager concept also promises to reshape the PMS landscape, allowing specialized managers to operate more independently while still adhering to regulatory standards. The industry must now prioritize holistic risk assessments, focusing on metrics beyond one-year performance to ensure more comprehensive and reliable investment decisions.
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