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Informist, Friday, May 15, 2026

 

MUMBAI – The sustained growth of portfolio management services will be contingent upon maintaining investor trust in the industry because ticket sizes are much bigger and the relationship with customers is more bespoke, Amarjeet Singh, whole-time member at the Securities and Exchange Board of India, said in a speech at the PMS Pragyan event. "Therefore, the expectation from the industry is also higher, as compared to standardised products like mutual funds," he said.

 

Suitability, risk appetite, investment horizon, liquidity needs, and concentration risks must be properly assessed, Singh said, and advised the PMS industry to adopt good practices from other segments of the market, particularly mutual funds. There are useful lessons in areas such as investor service, convenience, grievance handling, disclosures, and operational standardisation, he said.

 

On the use of technology, Singh said cybersecurity, resilience, and data protection are now key business risks and central to investor protection. Portfolio managers should conduct proper audits and checks of technology service providers. "A related point is the need for firms to communicate responsibly about the use of AI (artificial intelligence)," he said.

 

The SEBI member noted that the industry has scaled meaningfully and has the potential to grow further. In the past decade, the total assets managed by portfolio managers have grown to INR 41.4 trillion from INR 10.4 trillion, a compounded annual growth rate of around 15%. He noted that discretionary PMS is the anchor of the industry, accounting for nearly 85% of assets and over 95% of the client base. In the past decade, discretionary assets under management, excluding the Employees' Provident Fund Organisation and Provident Fund, have grown at a compounded annual growth rate of over 20%, which indicates increased client preference to delegate active management of their portfolios.

 

"Our (SEBI's) approach has been to maintain a relatively light touch and proportionate framework while ensuring that core principles of investor protection, transparency, fiduciary duty, and risk management are not diluted," Singh said. Enumerating the steps taken by the markets regulator, he said it has streamlined digital onboarding of clients, facilitated regulation of PMS distributors through the Association of Portfolio Managers in India, and issued uniform guidelines for changes in distributor and on handling inflow and outflow of funds and securities. "As part of simplification, transfer of PMS business has also been permitted, subject to prior approval from SEBI," he said.  End

 

Reported by Eshitva Prakash

Edited by Rajeev Pai

 

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