Pandey delivered a keynote address on the sidelines of the event and described the PMS industry as a “differentiated provider of wealth solutions” that has become increasingly relevant in the fast -growing financial landscape of India.
“In 1993, PMS was an idea for his time,” he said, adding that Sebi brought PMS under his regulatory ambit when India’s GDP was only USD 279 billion. “Fast forward to 2024, our GDP has touched USD 3.9 trillion, which marked almost seven -time growth and India stands to the top five in the world.”
This economic increase, he noticed, created an explosion in private wealth, with the number of High Net-worthy individuals (HNIS) and Ultra-Hnis that increase annually.
Standardized investment strategies often fall short in such an environment. “That is exactly where PMs come in,” Pandey noted. “You offer tailor-made solutions that are tailored to the risk of an investor, financial goals and time horizon covered with transparency and performance-related reimbursements.”
Strong growth signals
Pandey emphasized the steady increase in the number of portfolio managers, which rose from 361 at the end of FY2021 to 479 as of 30 June 2025. During the same period, the customer base for PMS grew with a compound annual growth rate (CAGR) of 12%.
Discretionary PMS, where customers give investment decisions to portfolio managers, grew even faster with 13% CAGR and now forms 96% of the total PMS customer stock.
“Discretionary AUM, excluding EPFO and Provident Funds, has grown annually by 23%. That is a sign of growing confidence in active management,” Pandey noted.
Regulating reforms and industrial cooperation
Pandey described Sebi’s efforts to support the PMS ecosystem and to work closely with the APMI to simplify processes and promote transparency. The most important initiatives include:
- Streamlined digital client onboarding
- Simplified disclosure documents
- Clear infrastructure –
- Supervision of PMS -distributors
- Optional selection of secondary benchmarks
- Master circulars and operational manuals
“These are not only procedural tweaks. They are strategic enablers to help portfolio managers concentrate on delivering customer results,” explained Pandey. The average SEBI processing time for PMS registration and postal registration activities has also been improved from 74 days in FY24 to 49 days in FY25.
In addition, SEBI has implemented guarantees to protect investor interests, such as compulsory performance reports, high watermark reimbursement structures, disclosure of complaints and investment rules with related parties that require the permission of the customer.
Emphasis on governance and trust
While he acknowledges the progress of the industry, Pandey made a cautious remark about governance. “Customers entrust you with their capital and their future. Every fall in professional behavior or administration will eradicate this trust,” he warned.
He also emphasized the importance of curbing excessive performance claims. “Such misleading communication of some registered portfolio managers undermines the credibility of the industry,” he said, encouraging players in the industry to communicate performance claims in a responsible manner and to inform customers about considerations of risk-return and the benefits of possessing underlying effects.
Role of APMI and digital transformation
Pandey praised the role of APMI in promoting a cooperation approach to regulation. “Since its formation in 2021, APMI has made a structured dialogue with SEBI possible, as a result of which our shared agenda of investor protection and development of industry accelerates,” he noticed.
He called on APMI to improve investor consciousness by demystating PMS through simplified content and outreach programs. He also insisted on the association to continue data reporting processes via its Offsite Inspectorate Committee.
Digital transformation emerged as another important theme. “Onboarding, reporting and involvement must be engaged digitally. Sebi’s technology-driven supervision now puts the entire PMS ecosystem to embrace innovation,” he said.
Looking ahead: industry at bending point
Pandey closed his comments and repeated that the PMS industry of India is at a ‘bending point’.
“You have a powerful position – a flexible regulatory framework, active involvement via APMI and a rising pool of informed investors,” he said.
“But persistent growth will depend on continuous innovation, reinforced processes, investments in technology and especially keeping the interests of customers in the center.”
While APMI has started its fourth year, Pandey confirmed the dedication of Sebi to promote a future-oriented regulatory environment that supports co-creation and resilience in the PMS space.
(All the statements and data mentioned above come from Tuhin Kanta Pandey, chairman of Sebi, who spoke at the APMI conference in Mumbai on 6 August 2025)
((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
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