SEBI Portfolio Managers Regulations, 2026: Key Points

Key facts

What is this instrument?

It is a full rewrite of SEBI’s portfolio management rules. Regulation 46(1) says the 2020 regulations “shall stand repealed from the date on which these regulations come into force”. The rules below would apply from commencement.

Actions taken and applications pending under the 2020 text are deemed to be under the matching provisions of the new text (regulation 46(2)).

Registration, capital and people

An applicant must be a body corporate. The application fee is Rupees one lakh and the registration fee Rupees ten lakh (regulation 3, First Schedule). The certificate is “valid unless it is suspended or cancelled” (3(8)), but fees are paid for blocks of three years (7(1)).

• Net worth

  At least five crore rupees, held separately from capital adequacy requirements for other activities (4(a)(iv)(b)). This matters for a bank subsidiary with other regulated businesses. At least ten percent must be in unencumbered liquid assets, including deposits with scheduled commercial banks and government securities (4(a)(iv)(c)).

• People

  A principal officer, a compliance officer and one additional employee (4(a)(iii)). The principal officer needs five years in the securities market, two of them in portfolio management, advisory or fund management, plus NISM certification (4(b)(i)). The compliance officer role cannot go to the principal officer or that employee (27(3)).

• Control and fitness

  Prior Board approval is needed for a change in control (6(5)), and the manager must be a fit and proper person under Schedule II of the Intermediaries Regulations, 2008 (6(6)).

Clients, fees and disclosure

• Minimum investment

  The manager shall not accept funds or securities worth less than fifty lakh rupees per client (16(3)). This does not apply to an accredited investor, subject to disclosure (16(4)).

• Fees

  Fixed, return based or both, with no guarantee of returns and no up-front fees (15(3)). Fee ranges under each head go in the Disclosure Document (15(3)(c)). Mutual fund investment is through direct plans only, with no distribution fees (17(1)(g)).

• Disclosure Document

  It is given in digital format before the client agreement (15(2)(a)). It covers fees, risks, related party transactions, conflicts of interest, diversification policy, three years of audited financials and three years of time weighted performance (15(2)(c)). A chartered accountant certifies it at registration and yearly within six months of year end (15(2)(d)). Material changes go to the Board and clients within fifteen calendar days (15(2)(f), (i)).

• Related parties

  Investing in related parties or associates needs the client’s prior consent (15(1)(c)). Unrated securities of related parties or associates are barred (17(1)(i)).

Other duties a bank PMS arm would notice

Client funds go in a separate account at a scheduled commercial bank (16(9)). Each client’s holdings are segregated (16(8)). Non-advisory managers must appoint a custodian (19). Clients get a report at least every three months, including distributor commission paid for that client (24(1)). Books are kept for at least five years (22). Grievances must be redressed within twenty-one calendar days (16(14)).

Three special routes have their own chapters: eligible fund managers (Chapter III), co-investment portfolio managers (Chapter IV) and PRIM, the route into mutual fund units, which needs two crore rupees of net worth and a twenty-five lakh rupee minimum per client (regulations 31, 33).

Dates and transition

Existing portfolio managers would get these windows from commencement:

• Twelve months

  Net worth item (d) gives existing managers “within twelve months” to comply (4(a)(iv)(d)). Earlier client investments must meet the minimum amount (16(5)).

• Thirty six months

  Commencing business activity (6(8)). Earlier investments must meet prudential, unrated related party and credit rating limits in 17(1)(h), (i) and (k) (17(1)(l)).

What should firms do next?

The five points below are practical advice, not requirements of the regulations:

1. Map your PMS arm to the new text.Check each cited regulation against your licence, products and policies.
2. Test net worth and liquid assets.Confirm the Rs 5 crore floor and the 10% liquid-asset deployment are met without counting capital held for other activities.
3. Refresh the Disclosure Document and client contracts.Add fee ranges, related party and conflict details, and the three year audited statements (regulation 15).
4. Review group investments.List holdings in related parties or associates and decide how prior client consent would be recorded (15(1)(c)).
5. Diarise the transition dates.Put the 12 and 36 month windows from 1 April 2027 in the compliance calendar.

What this post did not summarise

Not summarised: definitions in regulation 2 beyond those used here; detailed rules for eligible fund managers and co-investment managers; the instrument lists in regulation 17; Chapters VII to X; the Second Schedule (code of conduct) and Third Schedule (agreement contents). The text was also not compared line by line with the 2020 regulations. Many items depend on later SEBI circulars.

Frequently asked questions

Sources (official, verified 13 October 2026)

1. SEBI, Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026 (With effect from April 1, 2027), regulation page, 12 October 2026 https://www.sebi.gov.in/legal/regulations/oct-2026/securities-and-exchange-board-of-india-portfolio-managers-regulations-2026-with-effect-from-april-1-2027-_105159.html
2. SEBI, gazette notification PDF, 7 October 2026 https://www.sebi.gov.in/sebi_data/attachdocs/oct-2026/1791802492923.pdf
3. SEBI, Regulations listing (2020 regulations shown as last amended on September 03, 2025) https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=3&smid=0

• India
• SEBI
• Portfolio managers
• PMS
• Net worth
• Disclosure Document
• Capital Market Regulations

← Back to all articles