SEBI Approves New PMS Rules, Broadens FPI Access to Commodities

NEW DELHI — The Securities and Exchange Board of India (SEBI) cleared a package of reforms for Portfolio Management Services (PMS) on 24 September 2026, expanding the range of assets that portfolio managers can offer and easing entry for foreign portfolio investors (FPIs). The changes were announced by the SEBI board during a meeting held in New Delhi and were reported by several independent outlets on 25 September.

Expanded Investment Universe

Under the new rules, PMS managers will be able to invest in a broader set of instruments, including commodity derivatives and certain structured products that were previously off‑limits. The move is expected to increase the attractiveness of PMS for sophisticated investors seeking diversified exposure beyond equities and debt.

FPI Access to Commodity Derivatives

SEBI has lifted restrictions that previously barred FPIs from trading in commodity derivatives through PMS. The decision follows a review of the regulatory framework that identified a gap in the product mix available to foreign investors. The board noted that the change would align India’s offerings with global best practices and could attract additional capital flows.

Relaxed Advertising Norms

The regulator also relaxed advertising norms for PMS. Portfolio managers can now use a wider range of marketing channels, provided they comply with disclosure requirements. The amendment is aimed at reducing the compliance burden on firms while maintaining investor protection.

Simplified Settlement Framework

SEBI has introduced a streamlined settlement framework for PMS transactions. The new structure reduces the time lag between trade execution and settlement, thereby improving liquidity and operational efficiency. The reforms also clarify the roles of custodians and depositories in the settlement process.

Impact on Domestic and Foreign Investors

Industry observers say the reforms will make PMS a more competitive vehicle for both domestic and foreign investors. By broadening asset classes and easing marketing restrictions, SEBI aims to attract larger institutional inflows and deepen the capital markets.

Regulatory Context

SEBI’s decision follows a series of consultations with market participants and a review of international best practices. The board’s approval is part of a broader strategy to enhance the regulatory environment for asset management and to keep India competitive in the global investment landscape.