Minimum Investment in PMS

PMS is an exclusive service extended to High Networth Individuals (HNIs) and institutions. You must be wondering why it is for a limited client base. The reason for this limitation is the minimum investment in PMS.

Portfolio Management Services aims to reduce the risk involved in the investments of the client. This reduction is possible due to the diversification of the investment portfolio.

A fund manager is hired by the client to manage his assets.

A portfolio is diversified by investing in multiple financial segments like equity, commodity, derivatives, currency, etc.

PMS Minimum Investment

To start PMS you need to have PMS Registration with a minimum investment in PMS is determined by SEBI (Securities and Exchanges Board of India).

Since a portfolio’s management is a risky affair, small investors are guarded by fixing a minimum investment amount. The minimum amount to invest in stock market in India is way different to the minimum investment in PMS – thus, make sure that you are aware of these differences.

The latest SEBI notification informed an increment in the minimum amount required to avail of the portfolio management services.

Before this notification, the amount was fixed at ₹25 lakhs. Now, the amount has been doubled to ₹50 lakhs. However, it needs to be understood that the PMS charges are separate costs and will be levied based on the cost structure set up by your PMS provider.

PMS Minimum Investment 2022

SEBI has been regulating the PMS industry since 1993. Before notifying the first regulation notification, the industry was free of any rules and regulations. This freedom made investors and managers equally vulnerable to malpractices.

SEBI Portfolio Managers Regulations 1993 was the beginning of a new era in the PMS industry.

The latest notification relating to this regulation was notified in November 2019. So, to be eligible for Portfolio management services in 2020, the investor must have a minimum investment in PMS of ₹50 lakhs.

PMS Minimum Investment SEBI

After SEBI announced the Portfolio Managers Regulations in 1993, it has been amended multiple times. Many notifications have been issued concerning the regulations.

Initially, the minimum investment in PMS was ₹25 lakhs. Over time, SEBI felt the need to increase it, and thus, a notification in November 2019 was issued.

This notification clearly stated an increase in the minimum investment in PMS to ₹50 lakhs.

Minimum Amount for PMS in India

Portfolio Management Services is not exclusive to India. It is provided to investors in various names across the globe. With a distinction in the title, a different amount is decided upon for extending the service.

The minimum amount for PMS in India is specified by the Indian Stock Market’s regulatory body – SEBI. SEBI has notified the minimum amount to be ₹50 lakhs.

This amount was recently increased from ₹25 lakhs to safeguard the small investors.

---

Conclusion

The PMS industry and the Indian Stock Market are both regulated by SEBI. The PMS industry was regulated after 1993 using the SEBI portfolio managers’ regulations, 1993.

This regulation was recently amended to increase the minimum investment in PMS to ₹50 lakhs.

We sincerely hope that your query regarding the minimum investment amount required for availing the PMS is cleared.

---

In case you are looking to use Portfolio Management Services, let us assist you in taking the next steps forward. Just fill in some basic details in the form below:

 

Know more about Portfolio Management Services