Sebi introduces prudential limits on PMS investments in related firms

The Securities and Exchange Board of India (Sebi) has imposed prudential limits on investments by portfolio managers in their own associates or related parties.

Under the amended framework, portfolio management schemes’ service providers will have to obtain prior consent of their clients if they intend to invest in related companies. 

Going ahead, portfolio managers will be allowed to invest up to 30 per cent of their client’s portfolio (as a percentage of the client’s AUM) in their own associates/related parties across equity, debt and hybrid securities. ­