What Is Sebi’s PRIM Framework?

The Portfolio Management Service Route for Investment in Mutual Fund units (PRIM) is a new framework introduced as a part of Securities and Exchange Board of India (Sebi) Portfolio Managers Regulations, 2026. Sebi notified it on October 7, 2026, with an aim to enable investors access different asset allocation strategies across mutual funds (MFs).

Sebi has permitted PRIM entities to invest into direct plans of MFs. It has lowered minimum investment requirements for PRIM compared to the conventional portfolio management services (PMS), while maintaining a stringent net worth criteria to safeguard investor capital.

What Is PRIM?

• Under PRIM, a registered portfolio manager can provide different asset allocation strategies.

• The mechanism seeks to provide high net-worth individuals (HNIs) a new avenue for investing their money.

• PRIM allows portfolio managers to build custom MF accounts for HNI clients to invest their money into MFs without paying commissions to intermediaries.

• The framework will allow new and existing portfolio management entities to launch segregated PRIM services.

• Key features include customised asset allocation, nil distributor commissions, and lower minimum investment barriers compared to traditional PMS.

How Does PRIM Work?

• Portfolio managers can put investors' money only in direct MF plans, exchange-traded funds (ETFs), or specialised investment funds (SIFs).

• The manager charges an agreed portfolio management fee directly to the client.

• They are prohibited from taking any scheme distribution commissions for the investment.

• The minimum investment ticket size required from any single client is fixed at Rs 25 lakh.

• Any continuation of the portfolio beyond the maturity period is treated as a fresh investment.

• Notably, underlying MF exit loads are waived when managers rebalance schemes within a portfolio.

How is PRIM Regulated?

• Under Sebi rules, dedicated PRIM applicants must maintain a continuous minimum net worth of Rs 2 crore, with at least 10 per cent of the net worth in liquid assets.

• Key PRIM personnel must include a principal officer possessing relevant capital market experience along with a mandatory and valid National Institute of Securities Markets (NISM) certification.

• Service providers must employ a compliance officer for statutory adherence and handling investor grievances.

• The new framework will formally take effect from April 1, 2027. The implementation timeline is expected to give market participants adequate time to upgrade software and complete the registrations of mandatory personnel.