Under SEBI’s updated Portfolio Managers Regulations, 2026, the ₹50 lakh minimum investment per client remains unchanged, ensuring PMS offerings stay accessible primarily to high-net-worth individuals.
The new rules, announced on October 7, 2026, will take effect on April 1, 2027. They outline the guidelines for portfolio managers, covering registration, operations, fees, and client responsibilities.
According to the updated system, portfolio managers are prohibited from accepting client funds or securities valued below ₹50 lakh. Accredited investors, however, are exempt from this minimum investment rule, provided proper disclosures are made in the relevant documents and terms are agreed upon between the investor and manager.
SEBI’s updated rules enforce stricter fee and investor protection standards. Portfolio managers are not allowed to charge any upfront fees, whether directly or indirectly. They can impose fixed fees, performance-based fees, or a mix of both, but must clearly state the fee ranges under various categories.
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Managers are required to hold client securities in separate accounts and keep client funds in a distinct account with a scheduled commercial bank. Any investor complaints must be resolved within 21 calendar days of receipt. These measures aim to enhance transparency and accountability within the portfolio management sector.
The ₹50 lakh minimum investment requirement limits conventional portfolio management services to investors with significant capital. In contrast, mutual funds provide an alternative for those seeking professionally managed portfolios without meeting this high investment threshold.
The regulations introduce a separate framework called the Portfolio Management Service Route for Investment in Mutual Fund Units (PRIM). For managers exclusively offering this service, the rules prescribe a minimum net worth of ₹2 crore and a minimum investment of ₹25 lakh per client.
PRIM offers a separate pathway with a lower minimum investment compared to traditional portfolio management, but it does not replace the ₹50 lakh requirement for standard services. Investors must carefully evaluate the services, fees, risks, and eligibility criteria to determine the most suitable investment option.