SEBI Startup

SEBI PRIM Route: The New ₹25 Lakh Mutual Fund Portfolio Management Framework

On 24 September 2026, the Securities and Exchange Board of India (SEBI) approved the Portfolio Managers Route for Investing in Mutual Fund Units, or PRIM. This route is also known as MF-PMS. Registered portfolio managers can manage client portfolios of ₹25 lakh or more through eligible mutual fund products. 

In the case of a general PMS, a minimum investment of ₹50 lakh is applicable. So, PRIM is creating an opportunity for professional portfolio management at a lower investment threshold. It creates a new regulated option between self-managed mutual fund investment and conventional PMS. 

Direct mutual fund plans, ETFs, index funds, and SIFs can be held in PRIM. Along with compliance requirements, fees, net worth, AMC exposure, and client segregation, they have also been prescribed. 

What Is the PRIM Route? 

PRIM is a portfolio management route where a registered portfolio manager can invest ₹25 lakh or more of a client’s money in eligible mutual fund products and create a portfolio. Here, the manager selects various funds and schemes instead of directly selecting individual shares for the client. 

The key tasks of a portfolio manager include: 

• Selecting a suitable mutual fund scheme. 
• Allocating money among various schemes. 
• Regularly monitoring the portfolio. 
• Rebalancing the allocation as needed. 
• Deciding to change or replace a scheme. 

The PRIM manager does not select the individual securities within the fund. The fund manager does this for the respective mutual fund. 

A major feature of PRIM is the use of direct plans. When an ordinary investor buys a direct mutual fund himself, he is responsible for scheme selection and portfolio management. In PRIM, that portfolio-level decision is made by the registered portfolio manager. 

PRIM Element	What It Means
Minimum ticket	₹25 lakh
Investment universe	Direct MFs, ETFs, index funds and SIFs
Portfolio decision-maker	Registered portfolio manager
Management fee	Fixed fee capped at 1% of AUM
Performance fee	Permitted
Minimum net worth	₹2 crore

What Can PRIM Managers Invest In? 

Under PRIM, the investment universe of portfolio managers is not limited to traditional mutual funds. They can build client portfolios using eligible direct plans of mutual funds, Exchange-Traded Funds (ETFs), index funds, and Specialized Investment Funds (SIFs).  

This wider investment universe allows portfolio managers to use a variety of strategies. For example: 

Mutual Funds: A specific investment strategy can be taken through active fund management. 

Index Funds: Allow you to follow the performance of a specific market index. 

ETFs: A fund-based market exposure can be taken through exchanges. 

SIFs: Can provide exposure to specific and specialized investment strategies. 

However, it is not necessary for every product. The portfolio manager must select the product for the client’s risk profile, financial goals, liquidity needs, and investment horizons. Therefore, the key to PRIM is not only fund selection but also proper allocation. 

How Is PRIM Different from Conventional PMS? 

There are some important differences between PRIM and conventional PMS. The biggest difference is the minimum investment and investment universe. Conventional PMS usually starts with a minimum investment of ₹50 lakh. In PRIM, that threshold has been reduced to ₹25 lakh. 

However, it would not be right to call PRIM just a low-cost PMS. Its main feature is the use of eligible mutual fund-based products to build a client portfolio. On the other hand, in a conventional PMS, the portfolio manager can directly select various permitted securities, such as shares or debt instruments. 

Feature	PRIM	Conventional PMS
Minimum investment	₹25 lakh	Generally, ₹50 lakh
Core investment universe	Direct MFs, ETFs, index funds, SIFs	Broader permitted securities
Portfolio manager’s role	Scheme selection and asset allocation	May directly select securities
Direct-plan focus	Central to PRIM	Not the defining feature
Investment approach	Fund-based portfolio construction	Direct-security and broader portfolio management

Who Can Offer PRIM? 

The portfolio manager must meet the applicable SEBI regulatory requirements to offer PRIM. An existing registered portfolio manager can introduce PRIM as a separate investment approach within their existing setup. 

On the other hand, if an applicant wants to deal only with PRIM-permitted securities, they can apply for a new registration. The Framework has a minimum net-worth requirement of ₹2 crore for portfolio managers. 

Investors should verify the SEBI registration of the provider and the regulatory basis for offering PRIM before availing the service. 

Minimum Investment: ₹25 Lakh and Fee Structure 

One of the important aspects of PRIM is the minimum investment of ₹25 lakh. This amount is applicable for the PRIM portfolio of the client. It should not be confused with the minimum purchase amount of a general mutual fund. Investments can be made in a mutual fund with a few hundred or a few thousand rupees. But the threshold of ₹25 lakh must be met to appoint a portfolio manager through PRIM. 

This threshold is lower than the ₹50 lakh requirement of conventional PMS. So, some investors with portfolios in the ₹25 lakh to ₹50 lakh range may consider professional fund-based portfolio management. 

Fee structure 

PRIM’s fixed management fee can be up to 1% of client AUM. It is also allowed to charge performance-based fees. So, it is not enough to just look at the 1% fee. Investors also need to have a clear idea about the benchmark, performance fee, high-water mark, underlying scheme expenses, ETF transaction costs, and applicable taxes. 

Key Safeguards Under PRIM 

SEBI has put in place some important safeguards under PRIM. These are aimed at reducing conflict of interest, controlling concentration of client money, and keeping the fee structure clearer. 

• Related AMC exposure: Investment portfolio exposure to schemes of affiliated, group, or associate AMCs cannot exceed 25%. It provides an opportunity to reduce excessive concentration in any AMC. 

• Segregation of activities: If an entity handles both mutual fund distribution and PRIM, the applicable activities and clients must be kept separate. There are certain exceptions in the case of accredited investors. 

• Net worth: There is a prescribed ₹2 crore minimum net worth requirement for PRIM. 

• Fee regulation: The fixed management fee cannot exceed 1% of client AUM. 

• Investor protection: These rules help in reducing potential conflicts between the commercial interest of the manager and the client portfolio. They also aim to reduce the risk of concentration and unclear compensation. 

Other Portfolio Management Changes: IPOs, Debt and Global Investments 

Along with PRIM, SEBI has made some other changes to the portfolio management framework. This has widened the investment options of portfolio managers. 

IPOs and primary debt 

Portfolio managers can now invest in IPOs and primary market debt issuances. This can expand the equity and debt opportunities available for portfolio construction. 

Unlisted debt 

In the case of discretionary PMS, investment can be made in unlisted debt securities subject to certain conditions. Exposure can be kept at up to 10% of the client’s AUM. Securities have to meet applicable conditions. These include requirements such as investment-grade status and non-convertibility. The client’s consent is also required. 

Overseas investments 

Investment can also be made in permitted foreign securities under DPMS and NDPMS. These include: 

• Listed foreign equity 
• Foreign debt 
• Overseas REITs 
• Overseas mutual funds 
• ETFs and index funds 
• Foreign government debt 

What Does PRIM Mean for Investors and the Wealth Management Industry? 

PRIM is creating a new option for investors in professional mutual fund portfolio management. Due to the ₹25 lakh minimum threshold, some investors with less capital than conventional PMS may consider this structure. 

For investors 

• Benefits of professional scheme selection. 
• Portfolio-level asset allocation. 
• Regular monitoring and structured rebalancing. 
• Access to professionally managed fund portfolios from the ₹25 lakh threshold. 

For the industry 

PRIM is creating a new segment between direct mutual fund investing and conventional PMS. This can increase the scope for specialized fund-based portfolio management. Existing PMS firms can also offer new investment approaches. 

However, professional management does not mean a guarantee of higher returns. Portfolio performance will still depend on market conditions, fund selection, asset allocation, and applicable costs. 

Investor Checklist Before Choosing a PRIM Manager 

Before choosing a PRIM, investors should check a few things: 

• Check the portfolio manager’s SEBI registration. 
• Understand the investment strategy of the PRIM. 
• Know the complete fee structure. 
• Understand how the performance fee is calculated. 
• See which benchmark will be used. 
• Check the expenses of the underlying funds. 
• Ask how often the portfolio will be rebalanced. 
• Understand exit loads and tax implications. 
• Look at related or affiliated AMC exposure. 

How Can Enterslice Help with Compliance?  

It is important for portfolio managers and financial businesses to clearly understand the compliance requirements before implementing a new regulatory framework like PRIM. Enterslice can help businesses understand the applicable SEBI requirements and create a compliance process as per their regulatory structure. 

Our services: 

• Understanding applicable SEBI requirements. 
• Expert-led support in PMS registration,  
• Assistance in determining the structure of the proposed regulatory route. 
• Registration and documentation support. 
• Creating an internal compliance framework. 
• Assistance in preparing the necessary policies and regulatory documents. 
• Support in understanding and managing ongoing compliance requirements. 

However, the regulatory requirements of every business are not the same. Requirements may vary depending on the entity’s structure, proposed activities, registration status, and investment model. So, it is important to properly assess the applicable rules and documentation requirements before initiating PRIM-related services. Enterslice can provide professional compliance support to businesses to manage this regulatory process in a more organized manner. 

Conclusion 

SEBI’s PRIM route has created a new ₹25 lakh professional investment route for mutual fund-based portfolio management. Portfolio managers will be able to manage client fund selection and asset allocation using direct plans, ETFs, index funds, and SIFs. 

However, the investment opportunities are only one part of the PRIM framework. Fee limits, related AMC exposure, segregation requirements, and other compliance safeguards are also important. This framework allows portfolio managers to create a new service model for affluent investors.  

Enterslice can provide professional support to manage applicable SEBI requirements, regulatory structure, and ongoing compliance to start a PRIM-related business. So, contact us today for hassle-free compliance.  

Frequently Asked Questions