SEBI regulation › Portfolio Managers Regulations, 2026 › PRIM (MF-PMS)

SEBI PRIM (MF-PMS): the ₹25 lakh mutual fund portfolio route, explained

A source-checked reference on the Portfolio Managers Route for Investing in Mutual Fund units (PRIM) for investment advisers, research analysts, mutual fund distributors, portfolio managers and investors: what the SEBI Board approved, how compliance is lighter than conventional PMS, what can be offered to clients, and what is still unsettled.

Last reviewed 4 October 2026 · Primary source: SEBI PR No. 59/2026 (215th Board meeting, 24 September 2026) · How this page separates fact from expectation

PRIM in 60 seconds

What it is: a new route under the proposed SEBI (Portfolio Managers) Regulations, 2026 that lets a registered portfolio manager invest clients' funds in direct plans of mutual funds, including ETFs, index funds and Specialized Investment Funds (SIFs), of Indian AMCs. Board-approved
Also called: MF-PMS or "mutual fund-only PMS", the name used in SEBI's 23 July 2026 consultation paper.
Minimum ticket: ₹25 lakh, against ₹50 lakh for conventional PMS. Board-approved
New PRIM-only applicant: net worth ₹2 crore; Principal Officer with graduation / CFA / CA, two years' securities-market experience and a simplified NISM certification. Board-approved
Fees: fixed management fee capped at 1% of client AUM; performance-based fee model permitted; PMS exit-load provisions waived. Board-approved
Guardrails: 25% cap on schemes of affiliated / group / associate AMCs; segregation of activities and clients between MFD and PRIM for all clients except accredited investors. Board-approved
Status: approved by the Board on 24 September 2026; regulations, effective date and operational circulars are pending. Not yet settled

₹25 lakhMinimum client ticket (PMS: ₹50 lakh)

₹2 croreNet worth, PRIM-only applicant (PMS: ₹5 crore)

1%Cap on fixed management fee, of client AUM

25%Cap on affiliated / group / associate AMC schemes

How to read this page: fact, proposal, expectation

PRIM is at the "Board-approved, not yet notified" stage. Every statement here carries one of six labels so that nothing unsettled is presented as law.

Board-approved
Stated in SEBI's Board press release of 24 September 2026. A policy decision, not yet a notified regulation.

Consultation paper only
Proposed in the 23 July 2026 consultation paper but not restated in the Board release. May or may not survive into the final text.

Not yet settled
Not addressed anywhere official. Awaits the notified regulations or circulars.

Existing law
Position under the SEBI (Portfolio Managers) Regulations, 2020 and existing circulars, in force today.

Reported / industry view
Media reporting or a named industry participant's opinion. Not a SEBI statement.

Illustrative / our reading
An example or this site's own reading, offered to aid planning. Not a SEBI statement.

What is PRIM?

PRIM is a portfolio-management service built from mutual fund units. It is not a new mutual fund category, not an AIF, and not an advisory or distribution product.

The Board's definition Board-approved

Paragraph 1.2.1.5 of the Board release introduces the "Portfolio Managers Route for Investing in Mutual Fund units (PRIM) for enabling portfolio managers to invest clients' funds in direct plans of mutual funds including ETFs, Index Funds and Specialized Investment Funds (SIFs) of Indian Asset Management Companies (AMCs)".

The client gives a mandate; the portfolio manager selects schemes, sets weights and rebalances. Stock and bond selection stays inside the underlying schemes.

Two ways to offer it Board-approved

Existing portfolio managers may offer PRIM with a minimum ticket size of ₹25 lakh.
New applicants that intend to operate strictly within PRIM-permissible securities may obtain a new registration on the lighter conditions set out below.

The consultation paper said existing managers would do this through a separate investment approach. Consultation paper only

Why SEBI created it Consultation paper only

The consultation paper recorded "a recognized demand for a simplified 'Mutual Fund-only' PMS framework with lowered entry barriers", based on representations from industry stakeholders. Investors already have access to mutual funds; what PRIM adds is a regulated manager accountable for allocation, fund selection and rebalancing.

What PRIM is not

Not a pooled scheme: each client has an individual portfolio of units.
Not a route to buy shares, bonds, derivatives or foreign securities directly; those belong to conventional PMS. Illustrative / our reading
Not available on an IA, RA or ARN registration alone; a portfolio manager registration is needed.
Not live. No client can be onboarded under PRIM until notification. Not yet settled

PRIM rules approved by the SEBI Board

The complete list of PRIM-specific parameters in the Board release, with the consultation-paper position alongside so the changes are visible.

PRIM parameters: SEBI Board decision of 24 September 2026 (PR No. 59/2026, para 1.2.1.5) against the 23 July 2026 consultation paper
Parameter	Board decision, 24 Sep 2026	Consultation paper, 23 Jul 2026	What it means in practice
Name	PRIM	MF-PMS	Same framework. Use "PRIM" in documents; "MF-PMS" survives in search and press coverage.
Permitted investments	Direct plans of mutual funds including ETFs, index funds and SIFs of Indian AMCs Board-approved	Direct plans of mutual fund schemes including ETFs and SIFs	Index funds are now named expressly. Regular plans are outside the route. Scheme-category limits, if any, are Not yet settled.
Minimum ticket	₹25 lakh Board-approved	₹25 lakh	Half the conventional PMS minimum. Treatment of top-ups, withdrawals and in-specie transfer of existing units is Not yet settled.
Net worth (new PRIM applicant)	₹2 crore Board-approved	₹2 crore	Against ₹5 crore for a conventional portfolio manager. Computation method and any liquid-asset condition are Not yet settled.
Principal Officer	Graduation / CFA / CA with two years of experience in the securities market and a simplified NISM certification Board-approved	Graduation in any discipline; two years' experience (roles cited: portfolio manager, stock broker, investment adviser, research analyst, fund manager); simplified certification	Opens the role to experienced IAs, RAs and distribution professionals. The NISM syllabus and the list of qualifying experience are Not yet settled.
Exit load	Waiver of exit load provisions Board-approved	No exit load, "to protect clients from double charging"	The PMS-level exit load cannot be charged. Scheme-level exit loads of underlying funds are a separate matter. Illustrative / our reading
Affiliate exposure	Prudential cap of 25% on investments in schemes of affiliated / group / associate AMCs Board-approved	—	Prevents a captive single-AMC wrapper. Base of measurement and definitions are Not yet settled.
Fixed fee	Capped at a maximum of 1% of the client's AUM Board-approved	Capped at 2.5% of the client's AUM	The most material change between proposal and approval.
Performance fee	Performance-based fee model permitted Board-approved	Asked for public comment; proposed with explicit client consent	Hurdle, high-water mark, frequency and consent mechanics are Not yet settled.
MFD and PRIM	Segregation of activities and clients between MFD and PRIM for all clients except accredited investors Board-approved	Arm's-length relationship through a separately identifiable department or division; client-level segregation; same client not to be offered both services	The accredited-investor exception is new. How segregation is tested is Not yet settled.

Additional employee Consultation paper only

The consultation paper proposed that the additional qualified employee, mandatory for conventional PMS, be optional for MF-PMS. Not restated by the Board.

Dealing room Consultation paper only

Proposed as optional for MF-PMS. Separately, the Board approved a relaxed dealing-room requirement for all portfolio managers with AUM below ₹100 crore. Board-approved

Disclosure document Consultation paper only

The consultation paper proposed a simplified format for MF-PMS. The Board approved a move to a digital disclosure document for all portfolio managers. Board-approved

Common errors in circulation. Some summaries state that PRIM carries a 3%-2%-1% exit load, that the fixed-fee cap is 2.5%, that the universe is "Specified Investment Funds", or that REITs and InvITs are "explicitly prohibited". The Board release waives exit-load provisions, caps the fixed fee at 1%, and refers to Specialized Investment Funds. Domestic REITs and InvITs are simply not on the Board's list of PRIM investments; the release contains no express prohibition, and the final definition is awaited.

PRIM timeline: consultation to notification

23 July 2026SEBI issues the consultation paper on comprehensive review of the SEBI (Portfolio Managers) Regulations, 2020, following a stakeholder survey. It proposes MF-PMS with a ₹25 lakh ticket, ₹2 crore net worth and a 2.5% fixed-fee cap.
13 August 2026Public comment period closes.
24 September 2026215th SEBI Board meeting, Mumbai. The Board approves the SEBI (Portfolio Managers) Regulations, 2026 to replace the 2020 Regulations and introduces PRIM (PR No. 59/2026). Fixed-fee cap set at 1%.
30 September 2026SEBI Chairman Tuhin Kanta Pandey addresses the APMI Annual Conference in Mumbai on the new framework. Reported / industry view
4 October 2026Date of this review. No notified 2026 Regulations or PRIM circular located on SEBI's website.
PendingGazette notification of the 2026 Regulations and effective date. Not yet settled
PendingOperational circulars or master circular: forms, formats, fee mechanics, segregation norms, NISM certification. Not yet settled

PRIM vs PMS vs mutual funds vs SIF vs investment advice

The comparison clients and compliance teams ask for first. PRIM entries reflect the Board decision; conventional PMS entries reflect the 2020 Regulations as modified by the 2026 package.

Comparison of PRIM, conventional PMS, direct mutual fund investing, SIFs and RIA advice
Feature	PRIM	Conventional PMS	Mutual fund (direct plan)	SIF	RIA advice
Legal nature	Portfolio management service	Portfolio management service	Pooled scheme	Pooled strategy offered by a mutual fund	Advice; client transacts
Who decides	Portfolio manager, within mandate	Portfolio manager (discretionary) or client (non-discretionary)	Investor picks scheme	Investor picks strategy	Client, after advice
Minimum	₹25 lakh	₹50 lakh	Scheme minimum	₹10 lakh at AMC level (not for accredited investors)	None prescribed
What is held	Direct-plan MF units, ETFs, index funds, SIF units of Indian AMCs	Securities directly, plus permitted funds; under the 2026 package also IPOs, limited unlisted investment-grade debt, derivatives up to 1.25× AUM, foreign securities	Units of the scheme	Units of the strategy	Whatever the client buys
Manager net worth	₹2 crore (PRIM-only applicant)	₹5 crore	AMC norms	AMC norms	IA Regulations norms
Fee to manager	Fixed fee ≤ 1% of AUM; performance fee permitted; plus scheme TER	As agreed (fixed and/or performance); operating expenses capped at 0.5% p.a., statutory levies to be excluded	Within TER	Within scheme expenses	Advisory fee under IA Regulations
Exit load at service level	Waived	Permitted within limits (maximum 3%, 2%, 1% in years one to three)	Per scheme	Per strategy	Not applicable
Key conflict controls	25% affiliate-AMC cap; MFD segregation; direct plans only	Related-party and disclosure rules	No distributor commission in direct plan	AMC-level rules	Advice and distribution segregation
Tax on rebalancing Illustrative / our reading	Redemptions and switches are transfers in the client's hands	Each sale is a transfer in the client's hands	Trades inside the scheme are not taxed in the unitholder's hands	Same as mutual fund	Client's own transactions

The tax row states general income-tax principles. The Board decision does not deal with tax, and no PRIM-specific tax clarification has been issued.

How PRIM reduces the compliance burden compared with conventional PMS

The relief comes in four layers, each with a different degree of certainty. A fifth layer runs the other way: controls that PRIM adds.

Existing PMS requirement against PRIM, by source
Requirement	Conventional PMS today Existing law	PRIM	Certainty
Client minimum	₹50 lakh	₹25 lakh	Board-approved
Net worth	₹5 crore	₹2 crore for a PRIM-only applicant	Board-approved
Principal Officer education	Professional qualification in finance, law, accountancy or business management, or CFA, or NISM post-graduate programme	Graduation / CFA / CA	Board-approved
Principal Officer experience	Five years in the securities market, including two in portfolio management, investment advisory or fund management	Two years in the securities market	Board-approved
Certification	Prescribed NISM certification	Simplified NISM certification	Board-approved (content Not yet settled)
Exit load	Exit-load provisions apply	Waived	Board-approved
Additional employee	Mandatory	Optional	Consultation paper only
Dedicated dealing room	Mandatory	Optional; in any case relaxed for all managers below ₹100 crore AUM	Consultation paper only / Board-approved
Disclosure document	Prescribed detailed format	Simplified format and requirements	Consultation paper only

Layer 1. PRIM-specific relief Board-approved

Capital: ₹2 crore instead of ₹5 crore, a 60% lower entry barrier.
People: a graduate with two years' securities-market experience can be Principal Officer, with a simplified NISM certification.
Exit load: no PMS-level exit-load schedule to draft, disclose, compute or dispute.

Layer 2. Relief for every portfolio manager, PRIM included Board-approved

Graduates eligible as Principal Officer across PMS.
Relaxed dealing-room requirement below ₹100 crore AUM; SEBI notes this covers 48% of registered portfolio managers.
Standardised Investment Management Agreement, with authority to operate demat and trading accounts embedded in it.
Harmonised timelines for material and non-material reporting.
Digital disclosure document.
Statutory levies excluded from the 0.5% p.a. operating-expense cap.
Regulations cut from 70 pages to 33; from 19,486 words to 11,308 (about 42%); provisos from 47 to 4; all "notwithstanding" clauses eliminated; grandfathering provisions removed or given clear expiry.

Layer 3. Proposed PRIM relief awaiting confirmation Consultation paper only

Additional qualified employee optional.
Dedicated dealing room optional.
Simplified disclosure-document format.

These were in the consultation paper's comparison table but are not itemised in the Board release. Budget for them, but confirm against the notified text.

Layer 4. Relief that follows from the narrower universe Illustrative / our reading

These are practical consequences of holding only fund units, not exemptions granted by SEBI:

Valuation rests on AMC-declared NAVs and exchange prices for ETFs; no unlisted or illiquid securities to value.
Corporate actions on underlying companies are handled inside the schemes.
The new PMS permissions that carry their own controls (IPO applications, 10% unlisted debt with client consent, derivatives up to 1.25× AUM, foreign securities under FEMA and LRS) do not arise in a PRIM-only firm.
Research and order-management needs are those of fund selection, not security dealing.

Whether a PRIM-only manager must appoint a custodian, and how units are to be held and reported, is Not yet settled.

Layer 5. What PRIM adds or tightens Board-approved

Fee ceiling: conventional PMS has no cap on the management fee; PRIM caps the fixed fee at 1%.
Affiliate cap: 25% limit on affiliated / group / associate AMC schemes, which needs monitoring.
MFD wall: segregation of activities and clients between distribution and PRIM, except for accredited investors.
Direct plans only: systems must prevent regular-plan transactions in a PRIM account.

What does not go away Illustrative / our reading

Nothing in the Board decision exempts PRIM from the core obligations of a portfolio manager. Plan to carry, as notified: registration and fit-and-proper criteria; client agreement; KYC and anti-money-laundering; risk profiling and suitability to the mandate; fiduciary duty and conflict management; disclosure document; periodic client and regulatory reporting; audit; grievance redressal including SCORES and ODR; record-keeping; cyber-security requirements; and the Common Advertisement Code approved at the same Board meeting.

In one sentence: SEBI has lowered the capital, qualification and exit-load requirements for a manager that confines itself to mutual fund units, simplified the rulebook for all portfolio managers, and in exchange placed fee and conflict-of-interest controls on PRIM that conventional PMS does not carry.

Products and strategies that may be offered under PRIM

Illustrative / our reading SEBI approved an investment universe, not a product list. The strategies below are examples of mandates that can be built from that universe. None is a SEBI-approved product, and each depends on the final definition of permissible securities.

1. Goal-based multi-asset allocation

Equity, debt, hybrid and gold funds mapped to a stated horizon and risk level, rebalanced within bands.

Building blocks: flexi-cap and large-cap index funds, short-duration and gilt funds, gold ETF.

2. Passive core, active satellite

Low-cost index funds or ETFs as the core, with a capped allocation to active direct plans chosen on a documented process.

Building blocks: broad-market index funds, selected active mid-cap or focused funds.

3. All-passive low-cost portfolio

Entirely index funds and ETFs across asset classes. The manager's value lies in allocation and discipline; fee sensitivity is highest here.

4. Factor or smart-beta rotation

Rules-based allocation among quality, value, momentum, low-volatility and equal-weight index funds or ETFs.

5. Dynamic asset allocation

Equity-debt mix shifted on a disclosed valuation or risk model. Each shift realises gains in the client's hands, so tax drag must be modelled.

6. Debt and income ladder

Target-maturity funds, gilt funds and high-grade debt funds sequenced to known cash needs.

7. Retirement drawdown

A conservative mix with a written withdrawal policy and periodic de-risking.

8. SIF-enhanced portfolio

A core of conventional funds with an allocation to SIF strategies such as long-short equity or debt. The ₹10 lakh SIF minimum at AMC level means a ₹25 lakh portfolio could, in practice, reach one or two fund houses' SIFs. Reported / industry view

9. International exposure through Indian schemes

Overseas fund-of-funds and ETFs of Indian AMCs, subject to the industry's overseas investment limits. Direct foreign securities are a conventional PMS permission.

10. Sector and thematic allocation

Tactical tilts through sectoral or thematic funds and ETFs within stated concentration limits.

11. Portfolio consolidation mandate

Rationalising a client's scattered holdings into a smaller, non-overlapping set. Industry commentators expect early demand from existing mutual fund investors with fragmented portfolios. Reported / industry view

12. Entry tier alongside conventional PMS

An existing portfolio manager offers PRIM at ₹25 lakh and conventional strategies at ₹50 lakh, with separate documents, benchmarks and performance records.

Inside the PRIM universe Board-approved

Direct plans of mutual fund schemes of Indian AMCs
Exchange traded funds
Index funds
Specialized Investment Funds

Not on the Board's PRIM list Illustrative / our reading

Listed or unlisted shares, bonds and debentures held directly
Derivatives positions taken directly
Foreign securities held directly
Regular plans of mutual funds
Units of REITs, InvITs and AIFs (not mentioned; final definition Not yet settled)

Fee illustration Illustrative / our reading

Client AUM under PRIM: Fixed management fee: (cap 1%) Assumed average TER of underlying direct plans:

fixed management fee per year, before GST

Underlying scheme expenses (through NAV):
Combined annual cost, excluding any performance fee, GST and scheme exit loads:

Illustration only, on a flat portfolio value. At the cap, ₹25,00,000 × 1% = ₹25,000 a year. PMS fees currently attract GST; no PRIM-specific treatment has been announced.

What PRIM means for investment advisers, research analysts, MFDs and others

The same Board decision lands differently on each registration. Regulatory facts are labelled; the rest is planning commentary. Illustrative / our reading

Mutual fund distributors (MFDs)

Rule: segregation of activities and clients between MFD and PRIM for all clients except accredited investors. Board-approved

For a non-accredited client, the working assumption is one relationship or the other: commission-earning distribution in regular plans, or a fee-earning PRIM mandate in direct plans.
PRIM uses direct plans, which pay no trail commission. Moving a client to PRIM replaces trail with a management fee of up to 1%.
The consultation paper required a separately identifiable department or division. Consultation paper only Whether a separate legal entity is needed or sufficient is Not yet settled.
A distributor quoted in Business Standard was awaiting clarity on whether distribution can continue alongside, and was concerned about clients below ₹25 lakh or unwilling to pay fees. Reported / industry view
A ₹2 crore net worth and a qualified Principal Officer are needed for registration.

Investment advisers (IAs / RIAs)

An IA registration does not permit discretionary management. PRIM needs a portfolio manager registration, or an IFM arrangement under one.
Investment-adviser experience was among the roles the consultation paper counted for the Principal Officer's two years. Consultation paper only
RIAs quoted in Business Standard see lower compliance and net-worth requirements, a wider market at ₹25 lakh, the ability to execute for the client and to show an actual performance record. Reported / industry view
The Board release says nothing on combining IA and PRIM activity in one entity or on the same client. Not yet settled
Fee stacking (advice fee plus PRIM fee plus TER) will need a clear answer for clients.

Research analysts (RAs)

An RA registration permits research and recommendations, not management of client money.
Research-analyst experience was among the roles cited for Principal Officer eligibility. Consultation paper only
Fund research, model portfolios and scheme scoring can become the investment process of a PRIM manager, through an own registration or as an IFM.
A model portfolio or subscription must not be described as PRIM unless delivered through a registered portfolio manager.

Existing portfolio managers

May offer PRIM with a ₹25 lakh minimum without a new registration. Board-approved
Uses: clients between ₹25 lakh and ₹50 lakh, family members of existing clients, and investors not ready for single-stock risk.
Whether the 1% cap, the 25% affiliate cap and the exit-load waiver apply identically to an existing manager's PRIM offering is implied but should be confirmed in the text. Not yet settled
Keep PRIM performance separate from conventional-strategy track records.

New PRIM-only applicants

Eligibility: ₹2 crore net worth; Principal Officer with graduation / CFA / CA, two years' experience and the simplified NISM certification. Board-approved
Must operate strictly within PRIM-permissible securities. Board-approved
Application form, fees, timelines, compliance-officer requirements and infrastructure conditions are Not yet settled.

AMCs, platforms and RTAs

PRIM is a new professional channel into direct plans, passive funds and SIFs. SIF assets were reported above ₹31,000 crore in August 2026. Reported / industry view
Group AMCs are limited by the 25% affiliate cap. Board-approved
Transaction rails for discretionary execution by a PRIM manager in client folios are Not yet settled.

Investors

Suits an investor with ₹25 lakh or more who wants a manager accountable for allocation and rebalancing.
PRIM is a service, not a better fund: returns come from the underlying schemes, and the fee is an added cost. A disciplined investor holding a few index funds will usually pay less, as one wealth manager put it. Reported / industry view
Market, interest-rate, credit and liquidity risks of the underlying schemes remain. PRIM offers no guarantee of higher returns.
Ask about total cost, tax on rebalancing, affiliate exposure and the benchmark.

Independent Fund Managers (IFMs) Board-approved

Approved in the same package for portfolio management generally, and a possible route for an adviser or analyst who does not want to build a full registration:

Registered portfolio manager bears full responsibility and liability for all IFM activities.
IFM qualifications, experience and certification same as Principal Officer.
Fees paid directly to the registered portfolio manager; orders flow through its infrastructure.
A portfolio manager may affiliate several IFMs; an IFM operates under one at a time.
Mandatory exit option for clients if an IFM leaves or is terminated.
APMI maintains a central database of active IFMs.

Whether the IFM model may be combined with a PRIM-only registration is Not yet settled.

Accredited investors. The MFD-PRIM segregation exception turns on accredited-investor status. The same Board meeting is reported to have widened accreditation to include securities-market exposure of ₹5 crore for individuals and ₹20 crore for corporates and trusts. Reported / industry view Check the notified accreditation criteria before relying on the exception.

The wider Portfolio Managers Regulations, 2026 package

PRIM is one item in a larger rewrite. The measures below apply to conventional PMS and should not be quoted as PRIM permissions.

Other measures approved on 24 September 2026 (PR No. 59/2026, para 1.2)
Measure	Board decision Board-approved	Further detail from the consultation paper Consultation paper only
IPOs and primary debt	Investment in IPOs and primary-market debt issuance permitted	—
Unlisted debt	Up to 10% of client AUM in investment-grade, non-convertible, unlisted debt securities, with client approval, under discretionary PMS	—
Derivatives	Exchange-traded derivatives up to 1.25 times client AUM	Unhedged short exposure up to 50% of AUM in equity derivatives; options exposure capped at 10% of AUM; explicit client consent
Foreign securities	Permitted under DPMS and NDPMS: listed equity, debt, REITs, overseas mutual funds, ETFs, index funds, foreign government debt; subject to FEMA and RBI's LRS	Explicit positive client consent
Eligible Fund Managers	May manage and advise an eligible investment fund's investment in overseas securities	—
Independent Fund Managers	Permitted with seven safeguards (see above)	IFMs bring their own clients and operate under one registered portfolio manager's umbrella
Other proposals	—	10% of net worth in unencumbered liquid assets; NISM Series III-C for compliance officers; minimum activity threshold of 10 clients or ₹5 crore AUM within three years; longer reporting timelines; surrender mechanism. Whether each survives is Not yet settled.

Common Advertisement Code Board-approved

Approved at the same meeting for stock brokers, depository participants, investment advisers, research analysts, online bond platform providers, portfolio managers and mutual funds / AMCs. Celebrities permitted for brand-level or entity-level promotion with prior approval and safeguards; mandatory prior approval otherwise replaced by post-issuance reporting within three working days; ratings and rankings by a Past Risk and Return Verification Agency may be advertised. PRIM marketing will fall under this code once it is in force.

Industry size: figures differ by source

The consultation paper put PMS AUM at ₹42.61 lakh crore on 31 May 2026, with 515 portfolio managers (226 in 2020) and about 2.19 lakh clients. Consultation paper only The SEBI Chairman's APMI address was reported as citing ₹9.2 lakh crore AUM in August 2026, 530-plus managers and about 2.2 lakh discretionary clients. Reported / industry view The two AUM figures are evidently computed on different bases; quote either only with its source. APMI's chairman, Vikas Khemani, has said the framework could potentially double the industry's size over time. Reported / industry view

What to expect in the final regulatory text

Not yet settled Everything in this section is expectation. It lists the questions the notified SEBI (Portfolio Managers) Regulations, 2026 and the circulars under them will need to answer. None of it is settled, and SEBI may decide any point differently.

Likely in the regulations

Definition of PRIM and of permissible securities; whether any scheme categories are excluded.
Date of commencement and transition from the 2020 Regulations.
PRIM as a separate category or condition of registration; conversion between PRIM-only and full registration.
Net-worth definition and any liquid-asset requirement for PRIM applicants.
Principal Officer, compliance officer and employee requirements in final form.
Whether the three consultation-only reliefs (additional employee, dealing room, simplified disclosure document) are retained.
Basis of the 25% cap and definitions of affiliated, group and associate AMC.
Fixed-fee base and the performance-fee framework.
MFD segregation standard and the accredited-investor exception.
Custody and holding of units.

Likely in circulars or the master circular

Application form, fee and documents for PRIM registration.
The simplified NISM certification: syllabus, timeline, exemptions for existing certificate-holders.
Standard IMA text and PRIM disclosure-document format.
Minimum-ticket maintenance: top-ups, partial withdrawals, in-specie transfer of existing units.
Benchmarking and performance reporting for fund-of-fund-type portfolios.
Client and regulatory reporting formats.
Interaction with the ₹10 lakh SIF threshold.
IFM onboarding, APMI database and client-exit process.
Operational rails at RTAs, exchanges' MF platforms and depositories for discretionary transactions.
Application of the Common Advertisement Code to PRIM performance claims.

Open questions that matter most Not yet settled

Can one legal entity hold an ARN and a PRIM registration, or is a separate entity required?
Can an investment adviser hold a PRIM registration, and serve the same client under both?
Is the 25% affiliate cap tested per client or across the manager's PRIM AUM?
May existing mutual fund holdings be transferred in without redemption?
Are NRIs eligible on the same terms?
Does the 0.5% operating-expense cap apply to PRIM in the same way?
Are closed-ended, interval and overseas fund-of-fund schemes within scope?

Preparing before notification Illustrative / our reading

Decide the route: existing registration, new PRIM-only registration, or IFM.
Map the proposed Principal Officer against the Board-approved criteria.
Draft the investment approach, fund-selection methodology and rebalancing policy.
Model economics at 1% and below, including the loss of trail for distributors.
Design affiliate-cap monitoring and, for distributors, client tagging for segregation.
Prepare a tax-impact note on rebalancing for clients.

Do not advertise PRIM as available, accept client money under it, or describe it as "zero exit load" or "1% all-in" before the notified text supports the statement.

PRIM explainers and articles

Short, self-contained answers to the questions most often searched.

Explainer

What is SEBI's PRIM and how does it work?

PRIM, the Portfolio Managers Route for Investing in Mutual Fund units, was approved by the SEBI Board on 24 September 2026. A client with at least ₹25 lakh signs an agreement with a SEBI-registered portfolio manager. The manager invests that money in direct plans of mutual funds, including ETFs, index funds and Specialized Investment Funds, of Indian AMCs, and rebalances the portfolio under the mandate. The manager may charge a fixed fee of up to 1% of AUM and may use a performance-based fee model. No PMS exit load applies. Not more than 25% may go into schemes of AMCs affiliated to the manager. The framework takes effect only when the SEBI (Portfolio Managers) Regulations, 2026 are notified.

Comparison

PRIM vs PMS: seven differences

(1) Minimum investment is ₹25 lakh against ₹50 lakh. (2) A PRIM-only manager needs ₹2 crore net worth against ₹5 crore. (3) The Principal Officer needs two years' experience against five. (4) PRIM holds only mutual fund units, ETFs, index funds and SIFs; PMS holds securities directly. (5) PRIM's fixed fee is capped at 1%; PMS fees are as agreed. (6) PMS exit-load provisions are waived for PRIM. (7) PRIM carries a 25% affiliate-AMC cap and an MFD segregation rule that conventional PMS does not. An existing portfolio manager may offer both.

For distributors

PRIM for mutual fund distributors: opportunity and the segregation rule

PRIM gives a distribution business a regulated way to manage client portfolios on a discretionary basis for a fee. The condition is segregation of activities and clients between MFD and PRIM for all clients except accredited investors. Since PRIM invests in direct plans, a client moved to PRIM stops generating trail commission and starts paying a management fee of at most 1%. Distributors should model that switch client by client, and wait for the notified text on how segregation is to be structured before reorganising the business.

For advisers and analysts

Can an RIA or research analyst offer PRIM?

Not under the IA or RA registration itself. PRIM is portfolio management, so the service must be delivered by a registered portfolio manager. Two routes exist on the Board decision: obtain a PRIM registration through an entity with ₹2 crore net worth and a qualifying Principal Officer, or operate as an Independent Fund Manager under a registered portfolio manager, which keeps full liability and receives the fees. How IA and PRIM activities may coexist in one entity has not been stated.

Costs

PRIM fees, exit load and tax

The fixed management fee cannot exceed 1% of client AUM; the consultation paper's 2.5% was reduced by the Board. A performance-based fee model is permitted, with details awaited. PMS exit-load provisions are waived. The client still bears the expense ratio of each underlying scheme, GST on the manager's fee, and any exit load a scheme itself charges. On tax, the Board decision is silent; on general principles each redemption or switch by the manager is a transfer in the client's hands, unlike trades inside a mutual fund scheme.

Compliance

How much lighter is PRIM compliance than PMS?

Confirmed by the Board: net worth of ₹2 crore instead of ₹5 crore, a Principal Officer bar of graduation with two years' experience and a simplified NISM certification, and no exit-load provisions. Confirmed for all portfolio managers: a relaxed dealing-room requirement below ₹100 crore AUM, a standard agreement with embedded demat and trading authority, harmonised reporting timelines, a digital disclosure document, and regulations shortened from 70 pages to 33. Proposed but unconfirmed for PRIM: optional additional employee, optional dealing room and a simplified disclosure document. Added for PRIM: the 1% fee cap, 25% affiliate cap and MFD segregation.

Registration

How to register as a PRIM portfolio manager

The procedure has not been published. What is known: a new applicant operating strictly within PRIM-permissible securities needs ₹2 crore net worth and a Principal Officer holding a graduation degree, CFA or CA, with two years of securities-market experience and a simplified NISM certification. The application form, fees, documents and processing timeline will follow in the regulations and circulars. Existing portfolio managers need no new registration to offer PRIM.

PRIM frequently asked questions

22 questions on PRIM and MF-PMS, answered from the SEBI Board decision.

What is PRIM?

PRIM stands for Portfolio Managers Route for Investing in Mutual Fund units. The SEBI Board approved it on 24 September 2026 (PR No. 59/2026) as part of the proposed SEBI (Portfolio Managers) Regulations, 2026. It enables a SEBI-registered portfolio manager to invest clients' funds in direct plans of mutual funds, including ETFs, index funds and Specialized Investment Funds (SIFs), of Indian asset management companies.

Is PRIM the same as MF-PMS?

Yes. MF-PMS, or 'mutual fund-only PMS', was the working name used in SEBI's consultation paper of 23 July 2026. The Board decision of 24 September 2026 named the route PRIM. Both terms refer to the same framework.

Is PRIM live? Can clients be onboarded today?

No. As of 4 October 2026 the Board has approved the framework, but the SEBI (Portfolio Managers) Regulations, 2026 had not been found notified on SEBI's website and no operational circular or effective date had been published. Until notification, the SEBI (Portfolio Managers) Regulations, 2020 continue to be the law in force.

What is the minimum investment under PRIM?

The Board approved a minimum ticket size of INR 25 lakh, compared with INR 50 lakh for conventional portfolio management services. How top-ups, partial withdrawals, market-fall breaches and transferred-in units are treated has not been published.

What can a PRIM portfolio hold?

On the Board's wording: direct plans of mutual funds, including exchange traded funds (ETFs), index funds and Specialized Investment Funds (SIFs), of Indian AMCs. Direct equity shares, bonds, derivatives positions and foreign securities are not part of the PRIM list; those sit under conventional PMS. The exact definition of permissible securities will be in the notified regulations.

What fees can a PRIM manager charge?

The fixed management fee is capped at a maximum of 1% of the client's AUM. A performance-based fee model is also permitted. The consultation paper had proposed a 2.5% cap, which the Board reduced. The performance-fee mechanics (hurdle, high-water mark, frequency, consent) are not in the press release. The expense ratios of the underlying schemes are a separate cost borne through NAV.

Is the 1% cap the total cost to the client?

No. 1% is the ceiling on the fixed management fee only. The client also bears the total expense ratio of each underlying direct plan or SIF, any performance fee agreed, taxes on the fee, and any scheme-level exit load. Calling PRIM a '1% all-in' product would be inaccurate.

Is there an exit load in PRIM?

The Board approved a waiver of the PMS exit load provisions for PRIM. The consultation paper explained this as protection against double charging. Exit loads charged by the underlying mutual fund schemes themselves are a separate matter and may still apply under each scheme's terms.

Who can become a PRIM portfolio manager?

Two routes were approved. An existing registered portfolio manager may offer PRIM with a INR 25 lakh minimum ticket. A new applicant that will operate strictly within PRIM-permissible securities may obtain registration with net worth of INR 2 crore and a Principal Officer who holds a graduation degree, CFA or CA, has two years of securities-market experience and holds a simplified NISM certification.

Can a mutual fund distributor (MFD) offer PRIM?

The Board decision contemplates it, subject to segregation of activities and clients between mutual fund distribution and PRIM for all clients except accredited investors. The consultation paper described this as an arm's-length relationship through a separately identifiable department or division, with the same client not being offered both services. The final test of segregation will be in the notified text.

Can a SEBI-registered Investment Adviser (RIA) offer PRIM?

Not on the strength of the IA registration alone. PRIM is a portfolio-management activity; the entity must be a registered portfolio manager, or the individual may work as an Independent Fund Manager under one. The Board press release does not say how IA and PRIM activities may be combined in one entity; that is an open point.

Can a Research Analyst use PRIM?

A research analyst registration does not permit managing client money. Research analyst experience is, however, among the roles the consultation paper counted towards the two-year securities-market experience for a PRIM Principal Officer. A research analyst could apply for PRIM registration through an eligible entity, or act as an Independent Fund Manager under a registered portfolio manager, subject to the final regulations.

What is the 25% affiliated AMC cap?

A prudential cap of 25% applies on investments in schemes of affiliated, group or associate AMCs. Whether the 25% is measured per client or at manager level, and how 'affiliated', 'group' and 'associate' are defined, will be clear only from the notified text.

How is the compliance burden lower than conventional PMS?

For a PRIM-only applicant the Board approved lower net worth (INR 2 crore against INR 5 crore), a lower Principal Officer bar (graduate/CFA/CA with two years' experience and a simplified NISM certification, against a professional qualification with five years' experience), and waiver of exit-load provisions. The consultation paper also proposed an optional additional employee, an optional dealing room and a simplified disclosure document; those three were not restated in the Board press release and should be confirmed in the final text.

Does PRIM remove PMS compliance altogether?

No. PRIM remains portfolio management under the Portfolio Managers Regulations. Registration, the client agreement, KYC and anti-money-laundering obligations, fiduciary duties, disclosure, reporting, audit, grievance redressal and the advertisement code continue to apply as notified. Nothing in the Board decision exempts PRIM from these.

How is PRIM taxed?

The Board decision does not address tax. Under general income-tax principles, units are held in the client's own name, so each redemption or switch made by the manager is a transfer that can give rise to capital gains in the client's hands. This differs from a mutual fund scheme, where trades inside the scheme are not taxed in the unitholder's hands. Clients should obtain tax advice.

PRIM vs PMS: what is the difference?

Conventional PMS has a INR 50 lakh minimum, a INR 5 crore net-worth requirement and can hold listed securities directly, and under the 2026 package also IPOs, limited unlisted investment-grade debt, exchange-traded derivatives up to 1.25 times client AUM and foreign securities. PRIM has a INR 25 lakh minimum, INR 2 crore net worth for a PRIM-only applicant, a 1% fixed-fee cap, and is confined to direct plans of mutual funds including ETFs, index funds and SIFs of Indian AMCs.

PRIM vs mutual fund: what is the difference?

A mutual fund is a pooled scheme in which every investor in a plan holds the same portfolio. PRIM is a service: a portfolio manager builds and rebalances a portfolio of mutual fund units for each client under an agreement, and charges a management fee on top of scheme expenses. PRIM does not create a new asset class or a new scheme.

What are Specialized Investment Funds (SIFs) and can PRIM hold them?

SIFs are investment strategies offered by mutual funds under SEBI's SIF framework, with a minimum investment of INR 10 lakh per investor at the AMC level (not applicable to accredited investors). The Board expressly included SIFs in the PRIM universe. How the INR 10 lakh SIF threshold interacts with a INR 25 lakh PRIM account has not been clarified.

What is an Independent Fund Manager (IFM)?

An IFM manages client portfolios in association with a registered portfolio manager. The Board approved safeguards: the registered portfolio manager bears full responsibility and liability; the IFM must meet Principal Officer qualifications; fees are paid directly to the portfolio manager; orders flow through the portfolio manager's infrastructure; one IFM can operate under only one portfolio manager at a time; clients get a mandatory exit option if the IFM leaves or is terminated; and APMI will maintain a central database of active IFMs.

When will the final PRIM regulations be notified?

SEBI has not announced a date. Board-approved regulations are ordinarily notified in the Official Gazette some weeks or months after approval, followed by circulars. Any specific date quoted before SEBI publishes one is a guess.

Where is the official source for PRIM?

SEBI press release PR No. 59/2026, 'Key decisions taken in the SEBI Board Meeting dated 24th September, 2026', paragraph 1.2.1.5, on sebi.gov.in. The earlier proposal is in SEBI's consultation paper dated 23 July 2026 on the comprehensive review of the SEBI (Portfolio Managers) Regulations, 2020.

Glossary

PRIM: Portfolio Managers Route for Investing in Mutual Fund units. Board-approved on 24 September 2026; awaiting notification.
MF-PMS: Mutual fund-only PMS. The working name for PRIM in SEBI's 23 July 2026 consultation paper.
PMS: Portfolio Management Services, regulated under the SEBI (Portfolio Managers) Regulations, 2020, to be replaced by the 2026 Regulations once notified.
DPMS / NDPMS: Discretionary and Non-Discretionary Portfolio Management Services.
Direct plan: The plan of a mutual fund scheme that carries no distributor commission, and therefore a lower expense ratio than the regular plan.
ETF / index fund: Passive mutual fund schemes that track an index; ETFs are listed and traded on exchanges.
SIF: Specialized Investment Fund: investment strategies offered by mutual funds under SEBI's SIF framework, with a INR 10 lakh minimum at AMC level for non-accredited investors.
AMC: Asset management company of a mutual fund.
MFD: Mutual fund distributor, registered with AMFI and holding an ARN.
IA / RIA: Investment Adviser registered under the SEBI (Investment Advisers) Regulations, 2013.
RA: Research Analyst registered under the SEBI (Research Analysts) Regulations, 2014.
IFM: Independent Fund Manager: manages client portfolios in association with, and under the liability of, a registered portfolio manager.
Principal Officer: The employee of the portfolio manager responsible for its investment decisions and overall supervision.
Accredited investor: An investor accredited under SEBI's framework on the basis of income, net worth or, per the 24 September 2026 Board decision as reported, securities-market exposure.
APMI: Association of Portfolio Managers in India, the industry body for portfolio managers.
IMA: Investment Management Agreement between the portfolio manager and the client; a standardised IMA was approved for the 2026 Regulations.
TER: Total expense ratio of a mutual fund scheme, charged within the scheme's NAV.

Sources and method

Statements labelled Board-approved were checked against SEBI's press release. Where secondary coverage differed from the release, the release was followed. Links open the publisher's site.

Primary

Secondary

Cafemutual Board approval, distributor angle
Business Standard RIA and distributor views
Outlook Money: PRIM explained SIF data, industry comment
Outlook Money: Board meeting outcome accredited-investor changes
Business Today, 24 Sep 2026 · 25 Jul 2026
Legal 500 consultation-paper analysis
DMD Advocates Board-meeting summary
Asianet Newsable SEBI Chairman at APMI, 30 Sep 2026
inkl APMI chairman's remarks

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