SEBI’s new PMS framework could potentially double industry size over time: APMI Chairman Vikas Khemani
GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Mains·
Financial inclusion and capital market growth: a relevant GS3 topic on investment vehicles.
Why in news
APMI Chairman Vikas Khemani stated that SEBI's new PRIM framework could double the PMS industry size by allowing customized portfolios using mutual funds, ETFs, and SIFs.
Background
The PRIM framework allows portfolio managers to include direct mutual fund plans, ETFs, index funds, and SIFs in customized portfolios. The entry point for investors in the PMS ecosystem is set at ₹25 lakh.
Facts for Prelims
- FactThe entry point for investors in the PMS industry under the new framework is ₹25 lakh.
- FactPRIM allows the inclusion of direct mutual fund plans, ETFs, index funds, and SIFs in customized portfolios.
- BodyAssociation of Portfolio Managers in India (APMI) is the body representing the PMS industry.
Prelims practice question
With reference to the Portfolio Management Services (PMS) framework in India, consider the following statements:
- The PRIM framework allows portfolio managers to include direct mutual fund plans and ETFs in customized portfolios.
- The entry point for investors in the PMS ecosystem is set at ₹50 lakh.
- The Association of Portfolio Managers in India (APMI) represents the PMS industry.
Which of the statements given above is/are correct?
- (a)2 only
- (b)1 and 3 only
- (c)2 and 3 only
- (d)1, 2 and 3
Show answer
Answer: (b) 1 and 3 only — Statements 1 and 3 are correct. Statement 2 is incorrect: The entry point is set at ₹25 lakh.
For Mains
Q. Discuss how the expansion of investment vehicles and lower entry barriers in the Portfolio Management Services (PMS) framework can democratize wealth management in India.
Dimensions to cover in your answer
- Democratization of wealth: Lowering the entry point to ₹25 lakh expands access for a broader affluent investor base.
- Diversification of assets: Inclusion of SIFs and ETFs allows for more sophisticated risk-adjusted portfolio construction.
- Regulatory shift: Transition from security-centric to multi-vehicle portfolio construction broadens the scope of professional management.
Keywords: Portfolio Management Services · PRIM framework · Capital Markets · Financial Inclusion · Risk-adjusted returns · Asset Allocation
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