SEBI launches portfolio managers route for mutual funds: Here’s what the new ₹25 lakh PRIM route means for investors
The Securities and Exchange Board of India (SEBI), at its 215th meeting held in Mumbai on Thursday, approved the introduction of the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, which will replace the existing Portfolio Managers Regulations, 2020.
One of the key measures under the new regulations is the introduction of the Portfolio Managers Route for Investing in Mutual Fund units (PRIM).
The framework will allow portfolio managers to invest clients’ money in direct plans of mutual funds, including exchange-traded funds (ETFs), index funds and Specialised Investment Funds (SIFs) offered by Indian asset management companies (AMCs).
For investors, PRIM offers a way to invest in mutual funds through the Portfolio Management Services (PMS) route. Here’s what you need to know about the new route.
How can PRIM help investors manage their portfolios?
Sandeep Jethwani, Co-founder, Dezerv, said access to mutual funds is no longer the real challenge for investors. The bigger challenge is managing a portfolio well — deciding which funds to own, how much to allocate, when to rebalance, and how to stay disciplined through market cycles.
“Our research, based on over 8 lakh portfolio reviews, shows that more than half of investor portfolios underperform their benchmarks,” he added.
Even when investors select good funds, they may enter after strong recent performance, misallocate across funds, or struggle to stay invested through volatility. The gap is not access to products, but the quality and discipline of portfolio management, Jethwani noted.
He said PRIM changes this by putting these decisions with a regulated portfolio manager who invests only through direct plans. It creates clear accountability for the portfolio — from fund selection and allocation to rebalancing and navigating market cycles.
How does PRIM work and how could it widen access to portfolio management?
Under PRIM, registered portfolio managers will be able to construct customised portfolios for clients using direct plans of mutual funds, including ETFs, index funds and SIFs. SEBI’s approval of PRIM gives investors a new way to get their mutual fund portfolios professionally managed, Aditya Agarwal, Co-Founder, Wealthy.in, explained.
“The ₹25 lakh minimum investment in PRIM is lower than the ₹50 lakh minimum for conventional PMS,” Agarwal noted.
Vikas Khemani, Chairman, APMI, noted that the new route could broaden access to professionally managed mutual fund and SIF-based strategies.
“The introduction of PRIM — allowing portfolio managers to offer mutual fund and SIF-based strategies at a ₹25 lakh ticket size — meaningfully widens access and brings more investors into a well-regulated, professionally managed framework,” Khemani noted.
What are the key rules for PRIM?
SEBI said portfolio managers seeking to offer PRIM can obtain a new registration, subject to the framework’s requirements. The key guidelines include:
- Minimum ticket size: ₹25 lakh.
- Portfolio manager’s net worth: ₹2 crore.
- Portfolio manager’s eligibility: Graduation/CFA/CA with two years of experience in the securities market and a simplified NISM certification for the Principal Officer.
- Exit load: Waiver of exit load provisions.
- Exposure to affiliated AMCs: Investments in schemes of affiliated, group or associate AMCs will be capped at 25%.
- Management fee: Fixed management fee capped at a maximum of 1% of the client’s (or investor) AUM. A performance-based fee model is also permitted.
- MFD and PRIM segregation: Activities and clients must be segregated between Mutual Fund Distributor (MFD) and PRIM for all clients, except accredited investors.
For investors, this means ₹25 lakh will be the minimum amount required to access a PRIM strategy. The portfolio will be built using direct plans of mutual funds, while the 25% cap limits how much can be invested in schemes of affiliated AMCs.
The framework also caps the fixed management fee at 1% of AUM, although portfolio managers can opt for a performance-based fee.
The net-worth and qualification requirements, meanwhile, apply to the portfolio manager and are intended to set eligibility standards for those offering the service.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance.
She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram.
Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.
