India’s market regulator greenlights overseas stock investments for portfolio managers

India just handed its portfolio management industry a passport. The Securities and Exchange Board of India approved new regulations that, for the first time, allow portfolio management service providers to invest client money in overseas equities, foreign debt, and a range of international assets. The move affects an industry managing roughly Rs 42.61 lakh crore, approximately $5.1 trillion, in assets as of May 2026. That pool has more than doubled since 2019. What the new rules actually change The new Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replace the previous 2020 framework. Both discretionary and non-discretionary portfolio managers can now deploy client capital into listed foreign equities, listed debt securities, Real Estate Investment Trusts, overseas mutual funds, ETFs, index funds, and foreign government debt. All overseas investments must comply with the Foreign Exchange Management Act and the Reserve Bank of India’s Liberalised Remittance Scheme limits. Explicit client consent is required before any money crosses borders. Beyond the international access, SEBI introduced several other structural changes. Discretionary PMS operators c...