Comprehensive Analysis of SEBI's 215th Board Meeting: Sweeping Reforms Across PMS, Settlement Frameworks, and Alternative Investments

The Securities and Exchange Board of India (SEBI) convened its 215th Board Meeting in Mumbai on September 24, 2026, ushering in a transformative wave of regulatory updates. The capital markets regulator approved a massive overhaul of multiple operational frameworks, touching upon portfolio management, settlement proceedings, real estate and infrastructure trusts, foreign portfolio investments, and alternative investment funds.

By prioritizing the ease of doing business, enhancing investor protection, and modernizing compliance mandates, the regulatory body aims to deepen market participation while maintaining stringent oversight. Below is a detailed breakdown of the pivotal policy shifts and new regulations sanctioned during this landmark meeting.

1. Complete Overhaul of Portfolio Management Services (PMS)

To foster industry growth and streamline compliance, the regulator has greenlit the introduction of the SEBI (Portfolio Managers) Regulations, 2026. This new legal framework will entirely supersede the existing SEBI (Portfolio Managers) Regulations, 2020. The drafting of the new regulations focused heavily on simplifying legal language, removing redundant clauses, and consolidating disparate provisions.

Key Developmental Initiatives in PMS

The revised 2026 framework introduces several progressive investment avenues for portfolio managers:

  • Primary Market Access: Portfolio managers are now officially permitted to invest in Initial Public Offerings (IPOs) as well as primary debt market issuances.
  • Unlisted Debt Securities: Under Discretionary Portfolio Management Services (DPMS), managers can allocate up to 10% of a client’s Asset Under Management (AUM) into investment-grade, unlisted, non-convertible debt securities, provided explicit client consent is obtained.
  • Enhanced Derivative Limits: The threshold for investing in Exchange Traded Derivatives has been expanded, allowing flexibility up to 1.25 times the client’s AUM.
  • Foreign Securities Exposure: Investments in foreign securities are now permissible under both DPMS and Non-Discretionary Portfolio Management Services (NDPMS). Eligible instruments include overseas mutual funds, foreign government debt, Index Funds, ETFs, listed equity, debt, and REITs. These investments will remain strictly governed by the Foreign Exchange Management Act, 1999 and the Reserve Bank of India's Liberalized Remittance Scheme (LRS).

Introduction of the PRIM Framework

A major highlight is the introduction of the Portfolio Managers Route for Investing in Mutual Fund units (PRIM). This allows portfolio managers to channel client funds directly into direct plans of mutual funds, ETFs, Index Funds, and Specialized Investment Funds (SIFs).

  • Existing portfolio managers can offer PRIM as a distinct investment approach with a minimum ticket size of INR 25 Lakh.
  • New applicants intending to exclusively offer PRIM services can seek fresh registration under specific criteria: a minimum net worth of INR 2 crore, a simplified NISM certification for the Principal Officer, and a mandatory waiver of exit load provisions.
  • A prudential investment ceiling restricts allocations in affiliated or group Asset Management Companies (AMCs) to 25%.
  • Management fees under PRIM are capped at a maximum of 1% of the client's AUM, though performance-based fee models remain permissible.