Mumbai, February 23: The Securities and Exchange Board of India has announced a comprehensive review of the regulatory framework governing Portfolio Management Services. SEBI Chairman Tuhin Kanta Pandey said the regulator will reassess the SEBI Portfolio Managers Regulations, 2020 to ensure they remain relevant and aligned with evolving market conditions.
Speaking at an event at the National Institute of Securities Market near Mumbai, Pandey stated that the objective is to keep the framework effective, adaptable, and responsive to changing dynamics in the capital markets.
SEBI PMS Regulations 2020 Under Review
Pandey indicated that certain aspects of the six-year-old regulations require rationalisation. The proposed review follows similar regulatory exercises undertaken by SEBI in areas such as listing obligations and disclosure requirements as well as mutual fund norms.He clarified that the regulator will follow its established consultative process. SEBI will first issue a consultation paper, followed by draft regulations for public comments before finalising any amendments.
When asked whether SEBI is considering revising minimum investment thresholds for Portfolio Management Services, especially in light of the introduction of Specialized Investment Funds positioned between mutual funds and PMS, Pandey declined to comment on the specifics.
RBI Lending Norms: SEBI to Take Up Brokers’ Concerns
On the issue of revised lending guidelines issued by the Reserve Bank of India, the SEBI chief said the regulator has received representations from stock brokers highlighting operational challenges.From April 1, the RBI has proposed to prohibit banks from lending for proprietary trading and to require 100 percent collateral for most other bank funding extended to brokers.
Pandey said SEBI will examine the concerns raised and take up the matter with the central bank. However, he did not specify the regulator’s stance, noting that brokers have flagged multiple challenges under the new framework.
Review of Agricultural Futures Trading Ban
Pandey also said SEBI is working with relevant government ministries to review the ban on futures trading in agricultural commodities. The discussions are ongoing, though no further details were disclosed.SEBI Deploys AI-Based Surveillance Tools
Highlighting technological advancements, the SEBI Chairman said the regulator has started deploying artificial intelligence-based tools to strengthen its surveillance framework.These tools are being used to monitor influencers and ensure that boundaries around investment advice are not violated, reflecting a sharper focus on market integrity and compliance.
Action Taken Over Vigilance Lapses
Responding to reports about the suspension of a general manager-level official, Pandey confirmed that initial action has been taken following the detection of serious lapses. He described the matter as involving egregious issues and said appropriate steps had been initiated.The announcements underscore SEBI’s ongoing efforts to recalibrate regulatory oversight in areas such as portfolio management services, broker funding, commodity derivatives, and market surveillance as India’s capital markets continue to evolve.
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