The Securities and Exchange Board of India (SEBI) is undertaking a comprehensive review of the Portfolio Management Services (PMS) framework in consultation with the Association of Portfolio Managers in India (APMI) to 're-ignite growth' in the segment. According to reports from Business Standard, SEBI whole-time member Amarjeet Singh announced that the regulator would soon float a consultation paper on the proposed reforms during the Wealth and Capital Market Summit organised by the Indian Chamber of Commerce. The initiative aims to address challenges in the PMS segment and explore ways to enhance its growth potential.
SEBI is currently in the consultation stage on issues related to donation, gifting and third-party payments in mutual funds, as reported by Business Standard. The regulator's consultation paper issued on May 20 proposed a calibrated relaxation of existing restrictions on third-party payments in mutual funds, originally framed under Prevention of Money Laundering Act (PMLA) norms. Under the proposed framework, third-party payments may be permitted through 'clean and auditable routes' in select cases, including salary deductions by employers for systematic investments and payment of distributor commissions in the form of mutual fund units instead of cash.
The proposed system would allow listed companies, EPFO-registered firms and asset management companies to deduct a fixed amount from an employee's salary for investment in mutual fund schemes chosen by the employee, as reported by Business Standard. Additionally, AMCs may be allowed to pay trail commissions to empanelled distributors through mutual fund units. SEBI has proposed safeguards under which redemption proceeds and dividends would flow only into the verified bank account of the beneficiary investor or distributor, ensuring that no third-party cash exits are permitted. Public comments on the consultation paper have been invited till June 10.
SEBI is examining a framework to facilitate charitable donations through mutual funds, according to Business Standard reports. Under the proposal, investors may be allowed to route part of their subscription amount, dividends or redemption proceeds directly to not-for-profit organisations or instruments listed on the Social Stock Exchange. The consultation paper has proposed either dedicated schemes focused on social causes or embedded donation features within existing mutual fund schemes. This initiative aims to provide investors with structured options for supporting social causes through their mutual fund investments.
Addressing concerns about foreign institutional investors (FIIs) selling Indian equities worth more than ₹2.7 lakh crore between January and May 2026, SEBI whole-time member Amarjeet Singh stated that regulators are working on simplification measures for overseas investors, as reported by Business Standard. Singh emphasized that this involves multiple regulators working together to identify further simplification opportunities. He noted that while there are not many pain points on the table, there is always scope for improvement in the regulatory framework for foreign investors.
