- SEBI proposed a regulatory overhaul for portfolio managers to simplify compliance and boost safeguards
- The 2020 SEBI (Portfolio Managers) Regulations are under review to modernise and ease business processes
- Proposals include removing redundant rules, enhancing fee and risk disclosures, and improving transparency
The Securities and Exchange Board of India (SEBI) has proposed a comprehensive overhaul of the regulatory framework governing portfolio managers, seeking to simplify compliance, strengthen investor safeguards and align the rules with changes in the market since the regulations were introduced in 2020.
In a consultation paper released on Thursday, the markets regulator proposed a wide-ranging review of the SEBI (Portfolio Managers) Regulations, 2020, describing it as a comprehensive exercise aimed at modernising the framework and improving ease of doing business while maintaining investor protection.
The proposals seek to streamline regulatory requirements by removing redundant provisions, simplifying compliance obligations and shifting certain operational requirements from the regulations to circulars, allowing them to be updated more efficiently.
SEBI has also proposed strengthening disclosure requirements for portfolio managers, including enhanced transparency around fees, risks and investment strategies. The regulator said the changes are intended to improve investor awareness and ensure clients receive clearer and more consistent information before and during the course of portfolio management services.
The consultation paper further proposes rationalising reporting and record-keeping requirements, streamlining digital onboarding processes and providing greater operational flexibility to registered portfolio managers where investor interests are not compromised.
As part of the review, SEBI has also sought to strengthen governance standards for portfolio managers by refining provisions relating to compliance, internal controls and key personnel. It has proposed aligning the PMS framework with regulatory approaches adopted across other SEBI-regulated intermediaries to promote consistency in supervision.
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Portfolio Management Services are customised investment management offerings designed primarily for high-net-worth investors, with a minimum investment threshold of Rs.50 lakh.
SEBI said the review follows an assessment of the regulations after five years of implementation and takes into account regulatory experience, industry feedback and evolving market practices. The regulator has invited public comments on the consultation paper before finalising the proposed amendments.
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