Under the revised framework, portfolio managers can invest in IPOs, primary market debt issuances and a wider range of overseas securities.
They can also invest up to 10% of a client’s AUM in investment-grade unlisted non-convertible debt securities, with the client’s consent.
The framework also permits investments in overseas listed equity and debt, REITs, overseas mutual funds, ETFs, index funds and foreign government securities, subject to applicable regulations.
A key change for investors is PRIM (Portfolio Managers’ Route for Investing in Mutual Funds), under which portfolio managers can construct customised portfolios using direct plans of mutual funds, including ETFs, index funds and Specialised Investment Funds. The minimum investment is ₹25 lakh, compared with ₹50 lakh for conventional PMS.
Sandeep Jethwani, Co-founder, Dezerv, said PRIM addresses the challenge of portfolio management by putting fund selection, allocation and rebalancing with a regulated portfolio manager.
Aditya Agarwal, Co-founder of Wealthy.in, said the ₹25 lakh threshold could make professionally managed mutual fund portfolios accessible to a wider affluent investor base.
The regulator has also widened the accredited investor pool, allowing individuals with securities-market assets of ₹5 crore and body corporates with such assets of ₹20 crore to qualify, alongside existing income and net-worth criteria.
Dharmendra Jain, Co-Founder, Ionic Wealth, said this could expand the pool of investors eligible for such investment structures.
Vishal Trehan, Head India Sales and COO – Broking and Clearing, Aikyam Capital Group, said the PMS overhaul expands the investment universe and operating flexibility available to portfolio managers, while also allowing greater specialisation through Independent Fund Managers.