“Transition MFD to PRIM” asks whether a mutual fund distributor can move from distributing schemes to managing client money under the Portfolio Managers Route for Investing in Mutual Fund units. The SEBI Board approved PRIM on 24 September 2026, in press release PR No. 59/2026, paragraph 1.2.1.5, as part of the proposed SEBI (Portfolio Managers) Regulations, 2026. Approval is not notification. As of 4 October 2026 the 2026 Regulations had not been found notified, no effective date had been published, and the SEBI (Portfolio Managers) Regulations, 2020 remain the law in force.
What follows restates the guide at priminsight.online. It is not a SEBI publication and not legal, tax, compliance or investment advice. The notified text prevails. Sending an enquiry does not file a SEBI application and does not guarantee approval. MF-PMS was the consultation paper’s name for the same framework; the Board named it PRIM.
An ARN is not a PRIM registration
PRIM is not available on an ARN, investment-adviser or research-analyst registration alone. A portfolio manager registration is required. The Board set two routes. An existing registered portfolio manager may offer PRIM with a minimum ticket of ₹25 lakh without a new registration. A new applicant that will operate strictly within PRIM-permissible securities may seek a registration on the lighter conditions below. A distributor who is not already a portfolio manager is in the second route.
The Board contemplates a distributor offering PRIM only with segregation of activities and clients between MFD and PRIM for all clients except accredited investors. It did not publish an application form, a fee or a processing timeline. Those points are not yet settled. This note does not set out filing steps, because none have been published.
Net worth, Principal Officer, and conventional PMS
For a new applicant operating strictly within PRIM-permissible securities, the Board approved net worth of ₹2 crore and a Principal Officer with a graduation degree, CFA or CA, two years of securities-market experience, and a simplified NISM certification. The syllabus is not in the press release. A consultation-paper list of qualifying roles was not restated by the Board, so it is not used here as a rule.
Against conventional PMS, the guide uses only these contrasts: a ₹50 lakh client minimum and ₹5 crore net worth, versus PRIM’s ₹25 lakh ticket and ₹2 crore for a PRIM-only applicant, and a higher Principal Officer bar (a professional qualification or CFA or a NISM post-graduate programme, and five years’ experience, including two in portfolio management, advisory or fund management). The lower PRIM bar does not remove registration, the client agreement, KYC and anti-money-laundering, fiduciary duties, disclosure, reporting, audit, grievance redressal or the advertisement code. The Board decision does not exempt them.
Three consultation-paper ideas, an optional extra employee, an optional dealing room and a simplified disclosure document, were not restated by the Board. Do not treat them as approved. On the Board’s wording, holdings are direct plans of mutual funds, including ETFs, index funds and Specialized Investment Funds, of Indian AMCs. Direct equity, bonds, derivatives and foreign securities are not on that list. Regular plans fall outside the direct-plan wording. The exact definition waits for notification.
Segregation of distribution and PRIM
The Board’s distributor rule is segregation of activities and clients between MFD and PRIM for all clients except accredited investors. Read accreditation in the notified text; this note does not adopt reported changes to the criteria. The consultation paper’s arm’s-length department, and its bar on offering both services to the same client, were not restated by the Board. How segregation is tested, and whether one entity may hold an ARN and a PRIM registration, is not yet settled.
Direct plans carry no distributor commission. The guide’s distributor note says a client moved to PRIM stops generating trail and starts paying a management fee of at most 1% of AUM, and that the switch should be modelled client by client. The 1% figure is a ceiling on the fixed management fee, not a required rate and not the full client cost. The same note says to wait for the notified segregation text before reorganising the business.
Fee cap, exit load and the 25% affiliate limit
The fixed management fee is capped at 1% of the client’s AUM. A performance-based fee is permitted, but hurdle, high-water mark, frequency and consent are not in the press release. The consultation paper’s 2.5% cap was reduced. The client still bears scheme expense ratios, any performance fee, taxes on the fee and any scheme exit load, so “1% all-in” is inaccurate. PMS exit-load provisions are waived; scheme exit loads may still apply. Do not advertise the route as open, accept client money under it, or call it “zero exit load” or “1% all-in” before the notified text says so.
A 25% cap applies to schemes of affiliated, group or associate AMCs. Per client or across the manager, and the definitions, are not yet settled. For an existing portfolio manager, identical application of the 1% cap, the 25% cap and the exit-load waiver should be confirmed in the notified text. The Board decision does not deal with tax. The guide’s general principle is that units stand in the client’s name, so a redemption or switch can be a transfer in the client’s hands. That is not a SEBI tax rule.
What stays closed, and what an enquiry is
No client can be onboarded under PRIM until notification. Still unanswered here: whether one entity can hold an ARN and a PRIM registration, how the 25% cap is measured, and whether existing units can transfer in without redemption. An Independent Fund Manager model was approved for portfolio management generally, but whether it may be combined with a PRIM-only registration is not yet settled. It is not the missing application process.
Use the enquiry form at https://priminsight.online/#contact. It keeps the existing fields and posts to the site’s enquiry address, [email protected], with a mailto fallback. Phone: +91 7061710422. Do not send client personal data. The form does not register anyone with SEBI and does not guarantee approval. Prefer the Board press release, the Board PDF and the 23 July 2026 consultation paper, linked below.
Questions before any restructure
Can an MFD offer PRIM on an ARN alone?
No. PRIM is not available on an ARN, investment-adviser or research-analyst registration alone. A portfolio manager registration is required. The Board contemplates a distributor offering PRIM only with segregation of activities and clients between MFD and PRIM, except for accredited investors. The application form, fees and timeline have not been published. As of 4 October 2026 the route was not in force.
What did the Board set for a new PRIM applicant's net worth and Principal Officer?
For an applicant that will operate strictly within PRIM-permissible securities: net worth of ₹2 crore, and a Principal Officer with a graduation degree, CFA or CA, two years of securities-market experience, and a simplified NISM certification. The syllabus is not in the press release. This is the Board decision of 24 September 2026, not a notified regulation.
What segregation rule applies between distribution and PRIM?
The Board approved segregation of activities and clients between MFD and PRIM for all clients except accredited investors. The 23 July 2026 consultation paper discussed a separately identifiable department or division and not offering both services to the same client. The Board release did not restate that test. Whether one legal entity can hold an ARN and a PRIM registration is not yet settled.
Is 1% of AUM the client's total cost?
No. The Board capped the fixed management fee at 1% of the client's AUM. The client also bears scheme expense ratios, any performance fee, taxes on the fee, and any scheme-level exit load. Direct plans carry no distributor commission. PMS exit-load provisions are waived; scheme exit loads are separate. Do not call PRIM 1% all-in.
Can clients be onboarded under PRIM now?
No. As of 4 October 2026 the SEBI (Portfolio Managers) Regulations, 2026 had not been found notified. The 2020 Regulations remain the law. Do not advertise PRIM as available or accept client money under it. An enquiry on this site is not a SEBI application and is not an approval.