What rules apply to distributing PMS and AIFs in India?

Lesson 12 of 50 for advisers · PMS and AIF distribution · 5 min read · Reviewed 13 Nov 2026

Quick answer

A PMS distributor registers with APMI and is paid only as trail, out of the manager’s fees, with the commission told to the client beforehand. The PMS minimum is ₹50 lakh and AIFs ₹1 crore. AIFs offer a direct plan with no distribution fee; Category I and II may pay up to a third upfront, Category III only trail.

A PMS needs at least ₹50 lakh from the client. Since 2 May 2024 anyone distributing PMS registers with APMI, the portfolio managers’ association.

Portfolio managers must let clients join directly with no charges beyond statutory ones. They pay distributors only as trail, from their own fees, and tell the client the commission beforehand.

An AIF needs at least ₹1 crore, or ₹25 lakh for its own employees and directors. Every AIF offers a direct plan with no distribution fee.

Category I and II AIFs may pay a distributor up to a third upfront and the rest as trail. Category III AIFs pay trail only.

Key idea: From 1 Apr 2027, PMS client reports must show the commission paid to the distributor for that client.

Sources

Try the short quiz on this page to check what stuck.

Common questions

What changes with the PMS Regulations, 2026?

They take effect on 1 Apr 2027. The ₹50 lakh minimum stays, upfront fees are banned, the manager answers for its distributors, and client reports show the distributor’s commission.

What is PRIM?

A new route under the 2026 PMS rules: a portfolio manager that invests only in direct plans of mutual funds and SIFs, with a ₹25 lakh minimum.

Which certificate does a PMS distributor need?

NISM Series XXI-A. Those who held an ARN or NISM V-A on 7 Sep 2021 are exempt while it stays valid.

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