PMS Industry Seeks SEBI Nod to Lower ₹50 Lakh Minimum Investment Threshold

The Portfolio Management Services (PMS) industry has reached out to SEBI with a formal request to lower its mandated entry barrier of ₹50 lakh, as per news reports. The move is aimed at improving investor accessibility and maintaining competitiveness in light of new products like Specialised Investment Funds (SIFs).

APMI Pushes for Relaxation of ₹50 Lakh Minimum Requirement

The Association of Portfolio Managers in India (APMI) has approached SEBI, asking for a revision in the minimum investment threshold for PMS, currently set at ₹50 lakh. According to industry executives familiar with the development, the high investment cap has limited PMS offerings to a small investor base, hindering wider adoption and growth within the segment.

Competitive Pressure from SIFs Prompts Urgency

One significant reason behind this request is the anticipated impact of SIF schemes, which could steer inflows away from PMS owing to their potentially lower entry requirements and simplified structure. Lowering the threshold may serve as a counterbalance, helping PMS platforms remain competitive and appealing to a broader base of affluent investors.

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NRI KYC Concerns Featuring Prominently

Another major concern raised during the dialogue with SEBI relates to the Know Your Customer (KYC) norms for Non-Resident Indians (NRIs). Requirements such as two-factor authentication have proven to be incompatible with systems in several countries, including Nigeria. As a result, the onboarding timeline for NRIs has stretched from 1 week to nearly 2 months in some cases.

SEBI’s Response and Ongoing Discussions

At the recent APMI conclave, SEBI Chairman Tuhin Kanta Pandey confirmed ongoing collaboration with APMI on potential regulatory adjustments. While no formal announcement has been made yet, this engagement signals openness from the regulator to revisit existing norms and adopt reforms that align with evolving market demands.

Conclusion

The PMS industry's push to lower the ₹50 lakh minimum investment mark indicates a strategic effort to broaden its investor base amid the emergence of competitive alternatives like SIFs. Alongside simplified KYC processes for NRIs, these moves could unlock further participation in the PMS space and stimulate industry-level growth.

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