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SEBI clears PRIM route, letting PMS firms invest client money in mutual funds with Rs 25 lakh minimum
Reported by Siddharth Deshmukh (Staff Writer) · Economic Times - Markets ·
Reported by one source so far
Representative image · Wikimedia CommonsSEBI’s board has approved the Portfolio Rebalancing Investment Mechanism (PRIM), opening a new avenue for portfolio‑management services to place client money in direct mutual‑fund plans, exchange‑traded funds, index funds and sovereign‑infrastructure funds. The framework sets a minimum ticket size of Rs 25 lakh per client, ensuring that only sizable allocations can use the route. By permitting PMS firms to use these pooled‑investment products, the rule widens portfolio‑construction choices beyond traditional direct equities. The move is expected to give investors access to diversified, professionally managed assets while keeping costs lower than buying individual stocks. SEBI’s decision follows its ongoing effort to broaden investment options for the wealth‑management segment and align PMS practices with the broader mutual‑fund ecosystem.
ExplainerWhy this matters
What Happened
SEBI’s board gave the green light to the Portfolio Rebalancing Investment Mechanism (PRIM), a rule that lets portfolio‑management services invest client money in direct mutual‑fund plans, ETFs, index funds and sovereign‑infrastructure funds.
Why It Matters
The rule adds new tools for wealth managers. Instead of only buying stocks, they can now put money into pooled funds that spread risk across many securities. This can lower the cost for investors and bring professional fund management to PMS portfolios. The Rs 25 lakh minimum ensures the option is used for sizable investments, keeping the system manageable for regulators.
What Happens Next
PMS firms will start offering the PRIM options to eligible clients, and investors may shift part of their holdings into these funds. SEBI will monitor how the route is used and may fine‑tune the guidelines based on market response. Over time, the broader choice set could reshape how high‑net‑worth individuals build their investment portfolios.
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