The board of the Securities and Exchange Board of India (SEBI), on 24 September, approved a series of measures aimed at deepening market participation, widening investment avenues, and simplifying regulatory norms.
The market regulator’s board approved an overhaul of portfolio management rules, expanded access for foreign portfolio investors (FPIs) to commodity derivatives, and allowed depository receipts against REIT and InvIT units.
FPI access to commodity derivatives widened
Under SEBI’s new framework, FPIs will be allowed to trade non-agricultural commodity index derivatives and non-agricultural commodity derivatives that are not cash-settled.
However, for physically settled non-agricultural commodity contracts, FPIs will have to square off their positions three days before expiry, before the start of the tender or staggered delivery period.
Discretionary and non-discretionary PMS can now invest in foreign securities under the RBI’s Liberalised Remittance Scheme (LRS).
Moreover, derivative exposure limits for discretionary clients have been expanded up to 1.25 times client AUM.
Portfolio managers route for mutual funds
SEBI’s board approved the introduction of the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replacing the existing Portfolio Managers Regulations, 2020.
A key measure under the new rule is the introduction of the portfolio managers’ route for investing in mutual fund units (PRIM), enabling portfolio managers to invest clients’ funds in direct plans of mutual funds, including exchange-traded funds (ETFs), index funds and specialised investment funds (SIFs) of Indian asset management companies (AMCs).
An existing portfolio manager can offer PRIM as a separate investment approach, subject to a minimum ticket size of ₹25 Lakh.
Moreover, portfolio managers are now permitted to invest in IPOs and primary debt market issuances. Discretionary PMS can also invest up to 10% of a client’s assets under Management (AUM) in unlisted, investment-grade non-convertible debt, subject to client consent.
The introduction of the common advertisement code (CAC)
The market regulator has unified entity-specific advertisement rules under a single Common Advertisement Code (CAC) for stockbrokers, depository participants, mutual funds, portfolio managers, investment advisers, and research analysts.
Now, regulated entities are permitted to use celebrities for brand- and entity-level promotions, subject to prior approval.
It has eliminated routine pre-approval requirements (excluding celebrity ads) in favour of post-issuance reporting within three working days.
Regulated entities have been permitted to advertise ratings and rankings assigned by past risk and return verification agencies.
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