How Sebi's tighter new rules protect PMS investors from mis-selling

The recent changes are also meant to reduce regulatory arbitrage between PMS and mutual funds

The portfolio management service (PMS) industry has grown at a rapid pace in recent times. The number of clients under discretionary PMS has doubled from 75,000 to around 150,000 over the past three-year-and-a-half years. Many new portfolio managers have also entered this arena. Instances of mis-selling of this product were also being reported. Hence, the Securities and Exchange Board of India (Sebi) has gone ahead and proactively tightened the regulations (they were notified on January 21) for what is becoming a crucial product in the portfolios of mass affluent and high net worth individuals (HNIs).

Minimum investment hiked from Rs