SEBI Begins Review Of PMS Regulations, Targets June Timeline For Proposals

The Securities and Exchange Board of India has initiated a review of the SEBI Portfolio Managers Regulations, 2020.

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The regulator plans to issue a consultation paper as part of the process. Discussions will be held with industry committees before proposals are submitted to the board.

Tuhin Kanta Pandey, Chairman of the regulator, said the work on the review has already started. He said the regulator is targeting June for placing the proposals before the board. The comments were made at a PMS Conclave held in association with NISM and APMI.

Growth In PMS Industry

The review comes against the backdrop of sustained growth in the portfolio management services segment.

Assets under management, excluding EPFO and provident fund assets, have increased significantly over recent years.

AUM rose from about ₹5 trillion in FY21 to ₹10.5 trillion as of January 31, 2026. This represents a compounded annual growth rate of around 17% over the period.

Client participation has also expanded. The number of PMS clients increased to around 2.15 lakh. This marked nearly 50% growth compared with 2022 levels.

The number of registered portfolio managers rose from 361 to 501 during the same period. Distributor participation widened, with more than 7,000 individual distributor registrations added in FY26.

Regulatory Objectives

Pandey said the objective of the review is to ensure that the regulatory framework remains effective and adaptable.

He added that the framework must remain aligned with evolving market dynamics and newer product offerings. The regulator has already taken steps to ease business operations in the PMS segment.

These measures include simplified digital onboarding and standardised disclosure requirements.
SEBI has also introduced easier re-KYC norms for non-resident Indians. A mechanism has been put in place for time-bound transfer of PMS accounts between portfolio managers.

Issues Under Examination

The regulator is examining operational challenges that have been flagged earlier by market participants. These include the requirement to open a fresh demat account when shifting from one portfolio manager to another.
Such requirements have led to operational and tax-related complications for clients. These concerns were previously parked and are now being re-evaluated as part of the broader review.

The review is expected to assess whether existing rules adequately support the scale and structure of the PMS industry. SEBI aims to balance ease of operations with transparency and regulatory oversight as the segment continues to expand.