Mutual funds to gain as Sebi tightens norms for portfolio managers

The regulator will also prescribe a formula for profit sharing

The new norms on portfolio management services (PMS), introduced by the Securities and Exchange Board of India (Sebi) on Wednesday, may further tilt the playing field in favour of mutual funds (MFs), say industry players.

While the regulator’s board has approved of broader changes, such as a 2.5x increase in net worth to Rs 5 crore and doubling of minimum ticket size to Rs 50 lakh, it is in the process of enacting other changes through circulars to standardise performance reporting and fee structure, cap operational costs, and tightly regulate the industry.

So far, portfolio managers, who cater to rich