SEBI PMS overhaul could turn advisers into portfolio managers
₹25-lakh PRIM route gives wealth managers a new way to manage MF portfolios, while broader PMS mandate expands asset-allocation options
The Securities and Exchange Board of India (SEBI) is set to overhaul the portfolio management services (PMS) framework, potentially turning investment advisers and wealth managers into portfolio managers. Under the new Portfolio Managers’ Route for Investing in Mutual Fund Units (PRIM), portfolio managers can manage portfolios comprising direct plans of mutual funds, exchange-traded funds (ETFs), index funds, and Specialised Investment Funds (SIFs).
This move could broaden the scope of services provided by advisers and wealth managers, allowing them to offer a full-spectrum portfolio as an Asset Allocator, including IPOs, global investments, unlisted investment-grade debt, and the use of derivatives to manage portfolio risk. The shift could also change the economics of managing mutual fund portfolios, with fixed management fees capped at 1% of client assets under management (AUM) and performance-based fees permitted.
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