SEBI's move to double the minimum investment amount for portfolio management services (PMS) may force some high networth individuals to take the mutual fund route for making investments.
"SEBI's proposals will immensely help both the asset management industry as well as investors," said Sushant Bhansali, Chief Executive Officer, Ambit Asset Management.
"The ticket size increase should result in additional AUM for mutual funds as those in the Rs 25-50 lakh bracket will considering investing in MFs," he added.
On November 20, SEBI doubled the minimum investment in PMS funds to Rs 50 lakh.
However, existing investments will be allowed to continue until the end of the PMS agreement, the regulator said in a release detailing decisions taken at its board meet on November 20.
Concurring with Bhansali's view, Prakash Gagdani, CEO, 5Paisa.com, said: "By increasing the PMS limit SEBI has made it very clear that major section of the retail investor should come via mutual fund route."
SEBI also enhanced the net worth requirement of portfolio managers to Rs 5 crore from Rs 2 crore.
"Moving the investment to 50 lakh will ensure larger net worth clients who have the ability to work with an advisor to evaluate better will come into portfolio management schemes. Increase in net worth will ensure serious players remain in the business," said Ashish Shanker, Head - Investment Advisory, Motilal Oswal Private Wealth Management.
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