The SEBI Board decided to hike the minimum investment level under portfolio management schemes (PMS) to Rs 25 lakh from current level of Rs 5 lakh per client.
This has been done to protect the retail investors, Mr U.K.Sinha, SEBI Chairman said here after the Board meeting. He highlighted that PMS regulations are light touch regulations. Many retail investors are being drawn into PMS when their interests are not as tightly protected or guarded as it is in mutual fund regulations, he pointed out.
Mr Sinha also said that the enhanced minimum investment level of Rs 25 lakh per client will apply on a prospective basis. It’s only for new investors that the enhanced level will apply. The existing accounts will not be affected. However, existing investors in PMS are welcome to increase the investments in PMS if they have the capacity to do so.
Portfolio managers and wealth managers were keen that the existing minimum investment level of Rs 5 lakhs be maintained under the PMS. However, the SEBI Board has not acceded to their demands.
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