SEBI Allows Transfer of Portfolio Management Services Business

• 25 Oct 2025
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On 24 October 2025, the market regulator Securities and Exchange Board of India (abbreviated as SEBI) released a circular to allow portfolio managers to transfer their Portfolio Management Services (abbreviated as PMS) business (either fully or partially) to another registered portfolio manager subject to the regulator’s prior approval.

The move by SEBI intends to make processes simpler and promote ease of doing business within the PMS sector. Under the new framework, two transfer routes have been laid out by the market regulator i.e., (i) transfer within the same group and (ii) transfer outside the group. 

Under transfer within the group route, Portfolio managers who are part of the same group and hold SEBI registration can either transfer their entire PMS business or select investment strategies to another entity within the group. 

If the entire business is transferred, the transferring entity must surrender its registration certificate within 45 working days of completion of the transfer. If only specific investment strategies are transferred, the original manager may retain its registration.

In case of transfer outside the group, when transferring to an unrelated portfolio manager, both entities must submit a joint application to SEBI. In this case, only a complete business transfer is permitted. Partial transfers are not allowed. 

All the responsibilities must be assumed by the transferee such as pending litigations, obligations, and actions of the transferor, and must submit a formal undertaking in the prescribed format. Upon approval of SEBI, the entire process must be completed within two months, after which the transferor must surrender its registration certificate.

The circular issued by SEBI stated, “The entire process of transfer shall be completed as expeditiously as possible but not later than two months from the date of approval. Until the transfer process is complete, the transferor shall continue to act as Portfolio Manager but shall not onboard any new client(s)”.

The transferor as well as the transferee must provide undertakings to confirm the transfer details, regulatory compliance, client communication and completion of all the due formalities. In addition to this, certain supporting documents must also be submitted like the board resolutions, list of all the clients, agreements pertaining to the transfer and fit and proper declarations. The circular released by the market regulator is effective immediately.

Source: MoneyControl