Sebi chief Tuhin Kanta Pandey flags big PMS overhaul, to examine new RBI funding rules

The Securities and Exchange Board of India (Sebi) is planning a major overhaul of its portfolio management services (PMS) regulations, as announced by Chairperson Tuhin Kanta Pandey during a recent PMS conclave. This initiative aims to ensure that the regulatory framework remains effective and adaptable to the changing dynamics of the market. The revised draft regulations will be shared for public consultation ahead of Sebi's board meeting in June. Currently, the PMS industry, which serves approximately 215,000 clients and manages assets worth Rs 10.5 lakh crore, is growing at a compound annual growth rate (CAGR) of 17%. Pandey emphasized that beyond regulation, the industry's strength will depend on firms' daily governance practices, technology use, and client communication. Furthermore, Sebi will also review broker concerns regarding the Reserve Bank of India's (RBI) new capital market funding norms, which have increased collateral requirements for proprietary traders. While the RBI has stated that it will not reconsider these new rules, Sebi's engagement with brokers indicates a responsive regulatory environment. Additionally, Sebi is exploring mechanisms to oversee grey-market activities related to upcoming IPOs, focusing only on stocks set to list. This comprehensive approach highlights Sebi's commitment to enhancing investor protection and market integrity.