India's markets regulator on Thursday said it was seeking to reduce compliance for portfolio managers and proposed to give them more avenues to invest client funds.
The regulator proposed portfolio managers may be allowed to invest in to-be-listed securities, overseas listed equity and debt, among others.
The proposals seek to enhance the ease of doing business and provide flexibility to portfolio managers, the regulator said in a consultation paper.
Assets managed by India's portfolio management services (PMS) industry have grown to 42.61 trillion Indian rupees ($441.22 billion) as of May 31, 2026, from 18.07 trillion rupees in April 2019, prompting the Securities and Exchange Board of India to undertake a comprehensive review of its rules.
"Considering the increasing sophistication of investors, growing demand for more personalised solutions and diverse investment portfolio, a need was felt to review the PM (portfolio manager) Regulations," SEBI said.
By proposing to allow PMS to invest in overseas securities, the regulator is bringing them on par with mutual funds, alternative investment funds that already have overseas exposure options.
At present, PMS cannot invest in unlisted debt. The regulator has proposed that 10% of clients' funds could be invested in these instruments.
