Kolkata: SEBI whole-time member Amarjeet Singh on Saturday said the regulator is undertaking a comprehensive review of the Portfolio Management Services (PMS) framework in consultation with industry body Association of Portfolio Managers in India (APMI) to “re-ignite growth” in the segment.
Addressing the Wealth and Capital Market Summit organised by the Indian Chamber of Commerce, Singh said SEBI would soon float a consultation paper on the proposed reforms.
“We are undertaking a comprehensive review of PMS and are engaged with APMI for consultations to re-ignite growth in this space. A consultation paper will be floated soon,” Singh said.
He also said the Securities and Exchange Board of India (SEBI) is currently in the consultation stage on issues related to donation, gifting and third-party payments in mutual funds, as the regulator seeks to balance investor convenience with anti-money laundering safeguards.
SEBI’s consultation paper issued on May 20 proposed a calibrated relaxation of the existing restrictions on third-party payments in mutual funds, which were 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 by employees 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.
In another proposal, AMCs may be allowed to pay trail commissions to empanelled distributors through mutual fund units.
However, 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.
Singh said the regulator is also examining a framework to facilitate charitable donations through mutual funds.
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.
Asked about relentless foreign fund outflows from Indian equities, Singh said regulators are already working on simplification measures for overseas investors.
Foreign institutional investors (FIIs) have sold Indian equities worth more than Rs 2.7 lakh crore between January and May 2026 so far, reflecting sustained pressure on domestic markets amid global uncertainty and shifting capital flows.
“This is a matter involving multiple regulators. We are all working together and seeing what further simplification can be done,” he said when asked about possible measures.
“There are not many pain points on the table; however, there is always scope for improvement,” he added.
Discussions are also being held with the mutual funds’ body AMFI on creating a common platform for asset management companies (AMCs), where investors can collectively raise concerns and seek specific information from companies.
This, in turn, will strengthen the AMCs’ ability to seek details and disclosures from companies, he said.
