India’s securities regulator, SEBI, has unveiled a consultation paper that proposes sweeping changes to the rules governing portfolio managers. The blueprint would relax compliance hurdles and broaden investment outlets, allowing managers to tap into overseas listed equity and debt, to-be‑listed securities, and even 10% of client assets in unlisted debt – an option currently barred. The move comes as the sector’s assets have ballooned to 42 mocha trillion rupees ($441 billion) as of May 31, 2026, up from 18.07 trillion in 2019, prompting a full rule‑review.

In addition, SEBI recommends a fresh category of portfolio managers focused on exchange‑traded funds, mutual‑fund schemes and niche investment funds for affluent but underserved investors. The minimum client commitment would shrink to 2.5 million rupees, and a manager’s net worth requirement could fall to 20 million rupees. The regulator also plans to widen derivatives exposure to 1.25‑times client assets and explore a model where independent fund managers operate under a registered platform, with the portfolio manager overseeing compliance.

Stakeholders are invited to submit comments by August 13. If adopted, these reforms could align India’s portfolio‑management framework with global peers and offer greater flexibility to both managers and investors.