How to Open a PMS Account: Documents, Demat, Agreement and Exit

To open a PMS account, you complete KYC, read the portfolio manager's disclosure document, sign an agreement and a power of attorney, open a new demat account in your name and fund it with at least ₹50 lakh in cash, shares or both. SEBI's investor charter for portfolio managers allows up to 7 working days to open the account for a resident individual once your documents are complete, and 14 for NRIs and non-individuals.

The rules below come from the SEBI (Portfolio Managers) Regulations, 2020 and SEBI's Master Circular for Portfolio Managers of 16 July 2025. New to the product? Start with what a PMS is and how it works.

Who can open a PMS account

Resident individuals, HUFs, companies, partnership firms and trusts can open a PMS account, as can NRIs, OCI cardholders and foreign portfolio investors, whom Regulation 25 permits.

The entry ticket is ₹50 lakh under Regulation 23(2), in funds, securities or a mix. SEBI's master circular adds that the first investment must be a single lump sum of at least ₹50 lakh, so you cannot build up to it in instalments. A manager can set a higher minimum for a strategy. Accredited investors may agree a lower amount with the manager under the same regulation, where the disclosure document provides for it.

How NRIs open a PMS account

For money you want to take back overseas, listed shares are bought on a repatriation basis through a bank branch designated for the Portfolio Investment Scheme (PIS), using an NRE (PIS) account, under Schedule III of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. Money from an NRO account follows the non-repatriable route, and NRO balances can be sent abroad within the RBI limit of USD 1 million a financial year.

The manager usually arranges the PIS bank account, an NRI demat account and a trading account together. SEBI's KYC rules ask NRIs for a passport or OCI card and overseas address proof.

Step 1: KYC and the PMS documents required

PAN is mandatory for every securities market account, and you also need a separate officially valid document for identity and address. The usual set:

• Individuals: PAN; a passport, driving licence, Aadhaar or voter ID as the officially valid document; a photograph; and bank proof, verified by a penny-drop test or a signed cancelled cheque.
• HUFs: the HUF's PAN and bank proof, the karta's KYC, a deed of declaration and a list of coparceners.
• Companies: board resolution, certificate of incorporation, memorandum and articles, PAN, address proof, authorised signatories and details of any beneficial owner holding more than 10%.
• Trusts: trust deed, list of trustees and authorised signatories, and KYC for each.

Everyone also signs a FATCA declaration, answers a risk-profile questionnaire and may give the manager a negative list of securities not to buy.

Step 2: the disclosure document, PMS agreement and fee annexure

Regulation 22(3) requires the manager to give you its disclosure document before you sign. It sets out every fee, the portfolio risks, related-party dealings, three years of performance and the manager's audited accounts. SEBI does not approve or certify it, so read it alongside our checklist for evaluating a PMS before investing.

Regulation 22 and Schedule IV require the PMS agreement to cover the investment approach and your restrictions, the contract period, early withdrawal terms, how the account is settled on maturity or early termination, custody, fees and, for a discretionary account, a cap on your liability at the amount invested. You also choose the type of service: discretionary, where the manager decides, or non-discretionary, where you approve each trade.

The master circular adds three safeguards to the paperwork:

• A fee annexure showing all charges on a sample ₹50 lakh portfolio over one year if it rises 20%, falls 20% or stays flat. You sign it separately and add a note, handwritten or typed, that you have understood it.
• A Most Important Terms and Conditions (MITC) document, which you acknowledge.
• No upfront fees, disclosure of the trail commission your distributor earns, and an option to join directly without a distributor.

Any clause saying the manager's decisions can never be questioned must still let you challenge decisions made in bad faith or involving fraud, a conflict of interest or gross negligence. Fee models are covered in PMS fees and charges: fixed, performance, hybrid and high-water mark.

Step 3: the PMS demat account, bank account and power of attorney

The PMS demat account

A new demat account is opened in your name and mapped to the manager's custodian, which Regulation 26 requires every portfolio manager handling client assets to appoint. The manager may not hold your securities in its own name and must keep each client's holdings separate, under Regulations 23(4) and 24(15). Because the account sits with one manager's custodian, moving to another manager usually means opening a fresh one.

Where the cash sits

Some managers open a bank account in your name and operate it under a power of attorney. Others hold it in a pooled client account at a scheduled commercial bank, which Regulation 23(5) allows, with client-wise records reconciled daily and a statement of your cash at least monthly.

What the PMS power of attorney does and does not allow

The power of attorney lets the manager place orders, settle trades and run the account for the strategy you signed up for. It does not let the manager:

• move your shares off-market, except to settle your own trades, provide margin for your own positions, deal in unlisted securities within the rules, or with your specific consent for each transfer, as Regulation 24(13) provides;
• lend your securities without your written authorisation, or borrow money or securities on your behalf;
• pay your money to anyone else: on termination, funds and securities go only to your verified bank and demat accounts.

At signing, the manager must explain which transactions the power of attorney covers.

Step 4: funding the account and the deployment period

You fund the account from your own verified bank account by cheque or electronic transfer, by moving shares from your verified demat account, or both. Shares you bring in count towards the ₹50 lakh at their value. The manager may keep them or sell those that do not fit the strategy, and any such sale is a capital gains event in your hands, so keep the original purchase dates and costs ready.

SEBI does not fix a deployment period. Some managers invest the full amount at once; others stagger it over time. While cash waits, the manager may park it in liquid mutual funds for cash management.

How long does it take to open a PMS account

These are maximums, not typical times, and day counts are clear working days. Account-opening times run from receipt of complete and accurate documents; the other day counts run from account opening or from your request, as shown.

What reports does a PMS send you and how often

Regulation 31 requires a report at least every three months, and whenever you ask. It covers holdings and values, every purchase and sale, dividends, expenses, risks, any debt default or downgrade, and the commission paid to your distributor. Most managers send it monthly.

SEBI's format shows your own portfolio's return as an XIRR, an annualised return that allows for when money went in and came out, along with the lowest, highest and median XIRR across all clients in the same investment approach. It also shows the investment approach's time-weighted return, which strips out the effect of money moving in and out, against an APMI-prescribed benchmark, under SEBI's circular of 16 December 2022. An independent chartered accountant audits your portfolio account every year, and you receive a copy of the certificate.

Can you add money to a PMS account later

Once the ₹50 lakh base is in place, you can add money on the terms in your agreement. SEBI sets no separate top-up minimum; managers set their own, commonly ₹1 lakh to ₹5 lakh, and many accept a monthly SIP of ₹1 lakh to ₹2 lakh.

Can you withdraw part of your money from a PMS

Partial withdrawals are allowed as your agreement provides, but SEBI's FAQ of 28 October 2020 says the portfolio left behind must not fall below the ₹50 lakh minimum. If a market fall alone takes the value below ₹50 lakh, you do not have to top up.

A withdrawal usually means the manager sells shares to raise cash, so gains are taxed in your hands that year. For FY 2026-27, under the Income-tax Act, 2025, listed shares held 12 months or less are taxed at 20%, and longer holdings at 12.5% on gains above ₹1.25 lakh a year, plus surcharge and 4% cess.

What exit load can a PMS charge

A portfolio manager cannot impose a lock-in, but it may charge an exit load on a part or full redemption, within the caps in paragraph 6.1.4 of the master circular:

• first year from the date of investment: up to 3% of the amount redeemed;
• second year: up to 2%;
• third year: up to 1%;
• after three years: nil.

These are ceilings, and a manager's own schedule in its disclosure document can be lower.

PMS exit process: getting your shares or cash back

Either side can end the agreement, and you can also take your money out early if SEBI suspends or cancels the manager's registration or the manager goes bankrupt, as Regulation 24(2) provides. A typical exit runs like this:

1. Send a written request in the form your agreement specifies, stating whether you want cash, your shares transferred, or a mix.
2. The manager stops investing, sells what has to be sold, and works out fees up to the exit date, any exit load and 18% GST on fees.
3. Regulation 31(3) entitles you to a detailed statement of accounts.
4. Securities move to your verified demat account and cash to your verified bank account.
5. The PMS account is closed; ask for written confirmation that nothing is outstanding, and a final tax statement.

SEBI sets no settlement deadline; the procedure and timing are whatever your agreement says. Taking shares back in kind avoids a forced sale at exit, while a cash exit crystallises gains in that financial year.

What changes from 1 April 2027

SEBI notified the SEBI (Portfolio Managers) Regulations, 2026 on 7 October 2026, replacing the 2020 rules from 1 April 2027. The ₹50 lakh minimum stays. The disclosure document becomes digital, with a free physical copy on request, and a separate route for portfolios that invest only in mutual fund units will have a lower minimum of ₹25 lakh.

SEBI's board said in September 2026 that a standardised investment management agreement will carry the authority to operate your demat and trading account, while a power of attorney for the bank account continues where RBI requires it. The agreement format, and the date it takes effect, had not been published as of October 2026.

How Sanriya helps with PMS onboarding

Sanriya Finvest Pvt. Ltd., Pune, is an APMI-registered PMS distributor (APRN01056) and an AMFI-registered mutual fund distributor (ARN-193359). We explain how each strategy and its documents work, help you assemble KYC, check forms before they reach the manager, and stay with you for top-ups, withdrawals and exit. The portfolio manager pays us a trail commission out of its own fee and must disclose it to you; we charge you nothing separately, and the decision stays with you. See our PMS page or contact us to start the paperwork.