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India's Wealth Boom to Drive Demand for Professional Portfolio Management

SEBI Chairman Tuhin Kanta Pandey stated that India's position as one of the fastest-growing major economies will lead to a significant increase in affluent investors. This new class of high-net-worth individuals will demand sophisticated, professionally managed investment solutions beyond standardized products. In response, SEBI is undertaking reviews of key regulations, including those for Portfolio Management Services, to modernize the framework. The regulator is also exploring AI for market surveillance and, jointly with the RBI, is developing new corporate bond index products to deepen the debt market.

Key Points: SEBI Foresees Wealth Management Surge as India's Economy Grows

  • India on track to become world's third largest economy
  • Rise of affluent investors seeking professional management
  • SEBI reviewing PMS and other regulations
  • Exploring AI for real-time market surveillance
  • SEBI and RBI jointly developing corporate bond index products
2 min read

India's economic surge to fuel demand for professional wealth management: SEBI Chairman

SEBI Chairman Tuhin Kanta Pandey says India's economic rise will create affluent investors needing sophisticated, professionally managed investment solutions.

"India remains among the fastest growing major economies. - Tuhin Kanta Pandey"

Mumbai, February 23

Addressing the Portfolio Managers' Conclave in Mumbai, SEBI Chairman Tuhin Kanta Pandey on Monday painted a robust picture of the nation's financial trajectory, asserting that the country is set for a historic shift in wealth dynamics.

He highlighted that "India remains among the fastest growing major economies," and emphasised that the nation "remains on the trajectory to becoming the world's third largest economy."

This macroeconomic climb is expected to fundamentally alter the investor profile in the country, as Pandey noted that "this growth will also bring a rise in the number of affluent investors."

According to the Chairman, this new class of high-net-worth individuals will require more than the traditional investment avenues currently available to the masses. He stated that these investors "seek professionally managed investment solutions" because they are increasingly looking for sophisticated strategies that go "beyond standardised products."

To meet this evolving demand, SEBI is already in the process of "undertaking reviews of LODR, settlement, and PMS regulations," specifically looking at a "rationalization based on industry and investor feedback" to ensure the regulatory framework remains contemporary and effective.

Responding to queries regarding market stability and the use of technology, Pandey said that SEBI is exploring the potential of Artificial Intelligence for "real-time detection, rather than just reactive enforcement" of market malpractices. On the regulatory front, he confirmed that a "consultation paper will be released for public input on the proposed changes to PMS regulations."

He clarified that while the "review of PMS regulations is driven by the need to rationalize certain aspects identified since 2020," the exact "scope of the PMS regulation review is not yet finalised, as proposals are still maturing."

Beyond portfolio management, the Chairman also revealed that "SEBI and RBI are jointly working on developing a corporate bond index and related products," which are intended to be "traded on exchanges." This joint effort aims to deepen the debt market, with Pandey noting that the product "falls under both jurisdictions due to trading on exchanges."

Furthermore, regarding industry concerns, he mentioned that SEBI will "examine the representations from brokers regarding RBI guidelines" concerning collateral and bank guarantees, ensuring that the regulator considers their stance on facilitating smoother proprietary trading.

- ANI

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Reader Comments

P
Priya S
Good to hear about the focus on AI for market surveillance. We need to protect small investors from manipulation. However, I hope the new PMS regulations don't make it an exclusive club for the ultra-rich. Wealth management should be accessible.
R
Rohit P
Finally! A corporate bond index traded on exchanges could be a game-changer. Our debt market is so underdeveloped compared to equity. This can provide much-needed stability and options for conservative investors like my parents. SEBI and RBI working together is key.
S
Sarah B
The growth story is impressive, but with more complex products comes the need for much better financial literacy. SEBI should mandate simple, clear communication from all wealth managers. Too many people get confused by jargon.
V
Vikram M
"Rationalization based on feedback" sounds good, but I hope it's genuine. Often, regulations become more complex. The focus should be on protecting investor money first, always. The broker concerns about collateral need a balanced solution.
K
Karthik V
Becoming the 3rd largest economy is a proud moment for every Indian. This kind of professional wealth management ecosystem will create high-quality jobs and keep our capital within the country. A very forward-looking vision.

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