PMS rules set for review, says Sebi Chief

Metro India News | MUMBAI

The Securities and Exchange Board of India (SEBI) will undertake a comprehensive review of regulations governing Portfolio Management Services (PMS), chairman Tuhin Kanta Pandey said on Monday. The announcement signals a fresh regulatory push to align the six-year-old framework with evolving market dynamics and emerging investment structures.

Speaking at an event at the National Institute of Securities Markets near Mumbai, Pandey said the regulator proposes to review the SEBI (Portfolio Managers) Regulations, 2020, to ensure the framework remains effective, adaptable and in tune with market developments. He noted that the exercise will be similar to recent reviews carried out on listing obligations, disclosure requirements and mutual fund regulations.

Pandey indicated that certain aspects of the current PMS regulations require rationalisation. As per Sebi’s established practice, the regulator will first issue a consultation paper and later release draft regulations for public comments. However, he declined to comment on whether Sebi is considering changes to the minimum investment threshold for PMS, especially after introducing a new category of Specialized Investment Funds (SIF), positioned between mutual funds and PMS.

On another regulatory front, Pandey said Sebi has received representations from stock brokers highlighting challenges arising from the Reserve Bank of India’s revised lending norms. From April 1, RBI has proposed restricting bank lending for proprietary trading and mandating 100 per cent collateral for most other funding to brokers. Sebi will examine the concerns and take up the matter with the central bank, he said, without elaborating on the regulator’s stance.

Pandey also said Sebi is working with government ministries to review the ban on futures trading in agricultural commodities. He added that the regulator has deployed artificial intelligence-based tools for market surveillance, including monitoring influencers to ensure compliance with investment advisory norms.

Responding to reports of disciplinary action against a senior official, Pandey confirmed that initial action had been taken following vigilance findings of serious lapses.