SEBI has issued a new circular regulating the transfer of client portfolios in the Portfolio Management Services (PMS) business. Effective immediately, portfolio managers must ensure transparency, client consent, and regulatory compliance during any portfolio transfer. The move aims to protect investor interests and uphold fiduciary standards in PMS operations.
In a bid to strengthen investor protection and ensure ethical conduct in the Portfolio Management Services (PMS) sector, the Securities and Exchange Board of India (SEBI) has released a circular outlining new norms for the transfer of client portfolios between portfolio managers. The circular, dated October 23, 2025, was published on the official NSE and BSE portals and is effective immediately.
The guidelines are designed to prevent unauthorized transfers, ensure client awareness, and maintain regulatory oversight in PMS transactions—especially during mergers, acquisitions, or business discontinuation.
Key Highlights:
Notable Update on Consent: Portfolio managers must obtain explicit written consent from clients before initiating any portfolio transfer to another PMS entity.
Major Takeaway on Disclosure: Clients must be informed about the rationale, terms, and implications of the transfer, including changes in investment strategy, fees, and risk profile.
Operational Safeguards: SEBI mandates that all transfers be executed in accordance with the PMS Regulations, 2020, and must be reported to the regulator within 7 working days.
Investor Protection Focus: The circular reinforces SEBI’s commitment to transparency, accountability, and safeguarding investor interests in the fast-evolving PMS landscape.
Regulatory Compliance: Non-compliance may attract penal action under SEBI’s enforcement framework, including suspension or cancellation of PMS registration.
This move is expected to bring greater clarity and trust to PMS operations, especially as the segment continues to attract high-net-worth investors seeking personalized asset management.
Sources: SEBI Circular (SEBI/HO/IMD/PMS1/CIR/2025/134), NSE India, BSE Corporate Announcements.