India expands overseas investment options for wealth funds

The Securities and Exchange Board of India (Sebi) has announced a major regulatory overhaul allowing the country’s US$463 billion portfolio management services (PMS) industry to invest in overseas securities and short equity options for the first time.

Under the new rules, portfolio managers can also invest in unlisted debt securities and utilize exchange-traded derivatives exposure of up to 1.25 times their clients’ assets. The changes aim to provide wealthy Indian investors with more diverse global investment opportunities, particularly in high-demand sectors like artificial intelligence.

Foreign investments in equity and debt will be facilitated through the Liberalised Remittance Scheme (LRS), which allows resident Indians to remit up to US$250,000 per financial year. The industry, which managed approximately 44.4 trillion rupees as of August, has seen rapid growth as demand for customized, professionally managed products increases.