SEBI Reviews Portfolio Management Services Framework and Mutual Fund Regulations
Sebi reviews PMS framework; starts consultations on MF gifting, donations
Business Standard
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The Securities and Exchange Board of India (SEBI) is reviewing the Portfolio Management Services (PMS) framework to stimulate growth in the sector, in collaboration with the Association of Portfolio Managers in India (APMI). Additionally, SEBI is consulting on potential reforms regarding donations and gifting in mutual funds, aiming to enhance investor convenience while ensuring compliance with anti-money laundering regulations.
- 01SEBI will release a consultation paper on the PMS framework to promote growth in the sector.
- 02The regulator is considering allowing third-party payments in mutual funds through verified routes, such as salary deductions for systematic investments.
- 03Charitable donations through mutual funds may be facilitated, allowing investors to direct funds to not-for-profit organizations.
- 04Foreign Institutional Investors (FIIs) have sold Indian equities worth over ₹2.7 lakh crore (approximately $32.5 billion USD) in 2026, prompting regulatory simplification discussions.
- 05SEBI is in talks with the mutual funds' body AMFI to create a common platform for asset management companies to address investor concerns.
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The Securities and Exchange Board of India (SEBI) is currently undertaking a comprehensive review of the Portfolio Management Services (PMS) framework, aiming to stimulate growth in the sector. Amarjeet Singh, a whole-time member of SEBI, announced that the regulator is collaborating with the Association of Portfolio Managers in India (APMI) and will soon issue a consultation paper outlining proposed reforms. In addition to PMS, SEBI is also consulting on the issues of donations, gifting, and third-party payments in mutual funds. The proposed changes include allowing third-party payments through 'clean and auditable routes,' such as salary deductions for systematic investments and distributor commissions paid in mutual fund units rather than cash. Furthermore, SEBI is exploring the possibility of enabling investors to make charitable donations directly through mutual funds, which could include dedicated schemes focused on social causes. Amid significant foreign fund outflows from Indian equities, totaling over ₹2.7 lakh crore (approximately $32.5 billion USD) in 2026, SEBI is discussing regulatory simplifications to enhance the investment experience for overseas investors. These efforts reflect SEBI's commitment to balancing investor convenience with regulatory safeguards.
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The proposed changes could enhance the investment landscape for Indian mutual funds, making it easier for investors to engage with charitable causes and streamline payment processes.
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