India’s market regulator greenlights overseas stock investments for portfolio managers
SEBI's sweeping overhaul of portfolio management rules opens foreign markets to a $5.1 trillion industry while slashing entry barriers for smaller investors.
India just handed its portfolio management industry a passport. The Securities and Exchange Board of India approved new regulations that, for the first time, allow portfolio management service providers to invest client money in overseas equities, foreign debt, and a range of international assets.
The move affects an industry managing roughly Rs 42.61 lakh crore, approximately $5.1 trillion, in assets as of May 2026. That pool has more than doubled since 2019.
What the new rules actually change
The new Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replace the previous 2020 framework.
Both discretionary and non-discretionary portfolio managers can now deploy client capital into listed foreign equities, listed debt securities, Real Estate Investment Trusts, overseas mutual funds, ETFs, index funds, and foreign government debt.
All overseas investments must comply with the Foreign Exchange Management Act and the Reserve Bank of India’s Liberalised Remittance Scheme limits. Explicit client consent is required before any money crosses borders.
Macro, rates, and crypto—what moved markets and what matters next.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Beyond the international access, SEBI introduced several other structural changes. Discretionary PMS operators can now allocate up to 10% of client assets under management into investment-grade unlisted debt. Derivatives exposure has been expanded to 1.25 times client AUM. And investments in to-be-listed securities, previously off limits, are now permissible.
SEBI first floated these ideas in a consultation paper on July 23, 2026. The final approval came roughly two months later, around September 24.
A new on-ramp for smaller investors
Perhaps the most consequential change for everyday investors is the creation of a mutual-fund-only PMS category. This new tier cuts the minimum investment threshold in half, from Rs 50 lakh to Rs 25 lakh.
Net-worth requirements for this new category drop from Rs 5 crore to Rs 2 crore, lowering the barrier for new firms to enter the business.
SEBI’s intent is fairly transparent: democratize access to professional portfolio management while simultaneously broadening the investment universe those managers can tap. The regulator is essentially trying to close the gap between what PMS providers could do and what mutual funds and AIFs were already doing.