SEBI clears Rs 25 lakh PRIM route for mutual-fund portfolios

MUMBAI: The Securities and Exchange Board of India board, meeting in Mumbai on 24 September 2026, cleared a new mutual-fund-only portfolio route that lowers the ticket size for managed portfolios built from direct mutual fund plans.

Under the draft Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026 that will replace the 2020 rules, SEBI is introducing Portfolio Managers Route for Investing in Mutual Fund units, shortened to PRIM. Existing portfolio managers can offer PRIM as a separate investment approach with a minimum ticket of Rs 25 lakh — half the conventional Rs 50 lakh PMS floor.

Applicants that want to operate only within PRIM's permitted securities can seek a fresh registration. Those applicants need a net worth of Rs 2 crore, a graduate, CFA or CA principal officer with two years of securities-market experience, and a simplified NISM certification.

Fee caps, AMC limits and what PRIM can hold

PRIM lets managers put client money into direct plans of Indian mutual funds, including ETFs, index funds and specialised investment funds. Fixed management fees are capped at 1 per cent of client AUM. Performance fees are also allowed. Exit-load provisions are waived under the PRIM guidelines summarised in the board note.

Investments in schemes of affiliated, group or associate AMCs are capped at 25 per cent. Mutual fund distributor activity and PRIM activity must be segregated for clients other than accredited investors.

The same board package also widens mainstream PMS investment options: IPOs and primary debt issuance; investment-grade unlisted non-convertible debt up to 10 per cent of client AUM under discretionary PMS with consent; exchange-traded derivatives flexibility up to 1.25 times client AUM; and foreign securities under FEMA and the Liberalised Remittance Scheme, including listed equity, debt, REITs, overseas funds and foreign government debt.

SEBI is also creating Independent Fund Managers who can run client portfolios while remaining affiliated to a registered portfolio manager that keeps full liability, fee collection and order flow through its infrastructure.

Why the change matters for Indian investors

SEBI's stated aims are industry development, easier compliance and cleaner drafting. The board note says the rewritten portfolio-manager regulations shrink from about 70 pages to 33 pages, with word count down roughly 42 per cent. For investors who wanted professional allocation across mutual funds without the older Rs 50 lakh PMS entry point, PRIM is the concrete product change.

The decisions sit in SEBI Press Release No. 59/2026 dated 24 September 2026. Detailed regulations still need notification before managers can onboard clients under the new labels. Until then, the board approval sets the policy direction rather than an immediate open window at every PMS house.

Portfolio managers surveyed earlier through the Association of Portfolio Managers in India fed into a 23 July 2026 consultation paper that preceded Thursday's board vote. PRIM sits beside other ease-of-doing-business tweaks in the same package, including a standardised investment management agreement and lighter dealing-room rules for managers with AUM below Rs 100 crore. Those changes do not alter the Rs 25 lakh PRIM ticket, but they signal SEBI wants smaller specialised managers in the mutual-fund-only lane as well as large PMS houses.

Reporting basis: SEBI Press Release No. 59/2026 on key decisions of the board meeting dated 24 September 2026, covering introduction of PRIM under the proposed Portfolio Managers Regulations, 2026.