SEBI has officially permitted Portfolio Managers to invest client money in global assets, including foreign stocks and REITs. While the regulator has set the investment framework, it clarified that the Reserve Bank of India will continue to control the specific limits on how much money can be moved abroad. This move opens new diversification options for Indian investors, provided they remain compliant with RBI guidelines.
The Securities and Exchange Board of India (SEBI) has taken a significant step toward allowing domestic portfolio managers to explore global markets. On September 24, 2026, the regulator approved new rules that permit Portfolio Management Services (PMS) providers to invest client capital into a variety of foreign assets. These include international listed stocks, debt securities, government-backed debt, and Real Estate Investment Trusts (REITs).
Clear Division Between SEBI and RBI
While the expansion of the investment scope is a major development for the industry, the regulator has been careful to define the boundaries of authority. During a recent industry conference, the SEBI leadership clarified that while they oversee the rules for what instruments a portfolio manager can choose, the Reserve Bank of India (RBI) retains full control over the actual foreign currency outflow. This means that the total amount of money allowed to be invested abroad will continue to be governed by the central bank's regulations, specifically under the Foreign Exchange Management Act (FEMA) and the Liberalised Remittance Scheme (LRS).
For investors, this division is important to understand. It ensures that the growth of these investment options does not bypass the central bank’s requirements for financial stability. Any PMS firm offering global investment options will have to strictly adhere to both the market rules set by SEBI and the remittance rules set by the RBI.
Modernizing Foreign Investor Infrastructure
Beyond domestic portfolio management, the regulator is also pushing for a faster and more efficient system for international institutional investors. The goal is to make it easier for global money to enter the Indian market by simplifying the registration process. This includes moving toward digital documentation and reducing the need for physical notarization of papers. By integrating modern platforms like SWIFT and the India Market Access portal, the regulator aims to reduce the paperwork that has historically slowed down foreign participation in Indian markets.
Stricter Stance on Inactive Companies
In addition to the new investment rules, the regulator also addressed concerns regarding dormant or inactive companies listed on stock exchanges. The SEBI leadership reaffirmed that stock exchanges have a responsibility to keep the market ecosystem healthy. If a company is no longer running a real business and exists only on paper, exchanges are encouraged to use verification methods to identify them. Delisting remains a key tool to ensure that only transparent and active companies remain on the trading boards, which helps protect the interests of retail investors.
What Investors Should Track
For those looking at global diversification through a PMS, the next steps will involve seeing how individual providers structure their new foreign product offerings. The key monitorable will be how these firms manage the regulatory compliance with RBI limits. While this creates a broader investment universe, investors should remain mindful that adding foreign assets introduces currency risk, where changes in the exchange rate between the Indian Rupee and foreign currencies can impact total returns.