PMS : The Big get Bigger

Today, SEBI increased the minimum client investment in PMS to 50 Lakhs ( from 25 Lakhs currently) as well as increased the networth requirement of portfolio manager to 5 Cr ( from 2 Cr currently)

This makes it difficult for new comers in the business and increases the advantages of existing and more established players.

It’s interesting to see that the Committee that suggested these proposals are all established entities.

3 replies on “PMS : The Big get Bigger”

I have spent the last 2 years trying to build a business in the asset management from scratch. I have poured money, sweat and tears into building something I am excited and passionate about.

And it’s been really hard not just because of the business but also the regulations.

We wanted to start an AIF and were hit by 42.5% tax on trusts. We then looked at PMS and now this happened.

Singapore or other jurisdictions allow start-ups in the space to start without any approval with 25 clients, why can’t SEBI have a similar policy? It’s so hard for a new entrant with new ideas or business policy

We started to build algorithms, reached out a prospects, built trust with them and then we get hit by something or the other. Does SEBI understand how hard it is to start a business in this field, does it even talk to startups or have a open hearing. So unfortunate.

Does SEBI want innovation, competition and new ideas to come into the space? Or is regulatory capture too entrenched for it to create a level playing field for startups.

It forces someone like me to think about relocating or doing some other business or getting a job or continuing doing business under the radar.

I want to live in India, be an entrepreneur and do something around investing and finance.

Also build a world class investing business in India.

I might fail in that endeavor and that I accept but damn SEBI for making me have to choose because of it.

This will actually increase the risk to retail investors since they will be forced to invest higher percentage of their portfolio to a PMS. SEBI is run by a bunch of illiterate bereaurats who do not understand how markets work. No wonder, with institutions like these we will always remain a developing nation.

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