SEBI Board to Deliberate on PMS Overhaul, Common Ad Code, and Settlement Rules on September 24

The Securities and Exchange Board of India (SEBI) is scheduled to hold a crucial board meeting on September 24, where it is anticipated to deliberate on a wide range of regulatory overhauls. The board's agenda includes comprehensive revisions to the Portfolio Management Services (PMS) framework, the implementation of a standardized advertisement code across market intermediaries, and updates to the regulator's settlement mechanisms.

The board will also consider multiple consultation papers issued in recent months that seek to expand product choices for domestic investors, streamline compliance, and deepen participation across various segments of India's capital markets.

Overhaul of Portfolio Management Services

A major focus of the upcoming meeting is the planned restructuring of the PMS industry. Under a consultation paper floated in July, SEBI proposed introducing a new sub-category of "mutual-fund-only" PMS (MF-PMS).

Key features of this proposed framework include:

• Permitting portfolio managers to offer dedicated, professionally managed portfolios consisting exclusively of direct mutual fund schemes.
• Expanding the eligible asset universe to exchange-traded funds (ETFs) and specialized investment vehicles.
• Granting a separate MF-PMS registration category aimed at streamlining portfolio curation without mixing direct equity strategies with mutual fund selection.

Currently, high-net-worth individuals (HNIs) in India require a minimum ticket size of ₹50 lakh to access portfolio management services. The proposed MF-PMS architecture aims to bridge the gap between retail mutual fund investing and tailored portfolio management, enabling registered managers to allocate capital into low-cost direct plans efficiently while charging fee-based advisory or management charges.

Unified Advertisement Code

In an effort to curb aggressive and misleading financial promotions, SEBI is set to review a common advertisement code applicable to registered intermediaries. The regulator has grown increasingly vigilant regarding promotional activities, performance claims, and marketing practices by market entities and associated finfluencers.

A unified code would consolidate disjointed guidelines across stock brokers, research analysts, investment advisers, and asset management companies into a single, comprehensive framework. The objective is to ensure transparent disclosures of risks, prohibit exaggerated past-performance projections, and enforce strict accountability on marketing materials published across digital and traditional media channels.

Revised Settlement Regulations and Market Access

The board is also expected to take up changes to SEBI's settlement regulations. Over the years, the settlement mechanism—which allows entities to settle regulatory proceedings without admission or denial of guilt through payment of charges and compliance remedies—has undergone several calibrations. The proposed revisions aim to streamline processing timelines, clarify terms of eligibility for settlements, and optimize the resource allocation of SEBI’s enforcement machinery.

Beyond core retail-focused measures, the board will assess broader market-deepening proposals, including:

• Commodity Derivatives Expansion: Relaxing eligibility and access norms to widen Foreign Portfolio Investor (FPI) participation in domestic non-agricultural commodity derivatives.
• REITs and InvITs: Frameworks enabling the issuance of depository receipts for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to attract offshore institutional capital.
• Vault Managers: Refinements to the operational and regulatory framework governing vault managers supporting the electronic gold receipt (EGR) ecosystem.

Significance for Indian Market Participants

If approved, the measures under consideration will mark a meaningful step toward modernizing Indian wealth management and market administration. For everyday investors, a transparent ad code and dedicated mutual-fund PMS structures could foster greater trust and access to institutional-quality asset allocation. Meanwhile, expanded avenues for foreign funds in commodities and infrastructure trusts are poised to enhance liquidity and depth across India's evolving financial landscape.

Tags: SEBI Portfolio Management Services Mutual Funds REITs InvITs Capital Markets