On the PMS norms, Pandey said, “We propose to carry out a comprehensive review… so that the framework remains effective, adaptable, and aligned with evolving market dynamics.” The draft regulations will be released for public consultation before Sebi’s June board meeting, he added.
The PMS industry, which has about 2.15 lakh clients, managed Rs 10.5 lakh crore in assets (excluding EPFO and PF) as of January 31, 2026, growing at a 17% CAGR, according to Sebi data.
“But regulation alone cannot build a strong industry. The real strength of PMS will come from what firms do every day — in governance, suitability, technology and conduct,” Pandey said.
He stressed that investor suitability must remain central to the business model. “Risk profiling, suitability assessment, and client communication must be clear, consistent, and evidence‑based. Going ahead, PMS distributors conduct matters the industry must guard against mis‑selling,” he said.
New RBI funding norms
Separately, Pandey said Sebi would examine representations from stock brokers on the Reserve Bank of India’s new capital market funding norms. The RBI has proposed raising bank‑guarantee collateral requirements for proprietary traders to 100% from 50%.
“We have received a representation. I saw it on Friday. We will see what we can and need to do on it because RBI had initially opened draft guidelines and sought their opinion,” Pandey said. “It is in relation to issues around bank guarantees and how much collateral has to be given for proprietary trading. There are three to four issues. Since the representation has come to us, we will have a look at it.”
Speaking to the media after RBI’s board meeting in New Delhi, Governor Sanjay Malhotra said the central bank is not considering a review of the recently announced rules on bank financing of stock‑market intermediaries. The framework was finalised after due consultation, he said. “There is no change that we are contemplating.”
Under the new regulations, banks’ lending to brokers will face more scrutiny in terms of collateral requirements as well as purpose of the loan, while proprietary trading is seen taking the biggest hit
Oversight on grey‑market trading
Pandey said Sebi is working on a mechanism to introduce oversight on ‘to‑be‑listed’ stocks — a move aimed at grey‑market activity linked to upcoming IPOs.
“I think we have fairly deliberated this issue internally, and there is a possibility of such through the exchange mechanism for to‑be‑listed stocks — not the entire unlisted space, but the to‑be‑listed space where Sebi’s jurisdiction comes from the statute,” he said.
He added that Sebi would work out the operational details and issue a consultation paper in due course.
Senior Sebi employee suspended
Pandey also addressed the suspension of a general manager on Friday in connection with a “sensitive vigilance matter.” The regulator is contemplating disciplinary proceedings.
“The evidence was egregious enough for us to act,” Pandey said. “It is important that if there is any such case, we will get to the bottom of it.”
