The Association of Portfolio Managers in India (APMI) on February 3, 2026, issued Circular No. APMI/2025-26/01 addressed to SEBI-registered Portfolio Managers, laying down best practice recommendations for inflow and outflow of funds and securities in Portfolio Management Services (PMS). The guidance has been framed in line with the Prevention of Money Laundering Act, 2002 (PMLA), SEBI’s Anti-Money Laundering (AML) Guidelines, and the AMFI Circular dated April 20, 2015, after deliberations with its Board and Working Committees.
The circular reiterates that PMLA provisions prohibit acceptance or payment of third-party funds or securities in portfolio accounts. Referring to the AMFI definition of “third party,” APMI has emphasized the regulatory and fraud risks arising from third-party inflows/outflows and informed that its recommendations were submitted to SEBI on October 31, 2025, to standardize PMS industry practices.
APMI has recommended the adoption of the “Common Account Holder Principle,” mandating at least one common account holder between the PMS account and the linked personal bank/demat account for all inflows and outflows. Portfolio Managers must independently verify compliance during onboarding and transaction approval. The same principle applies to redemptions and payouts, supported by an illustrative matrix outlining permissible account holder combinations for industry adoption.
[Notification No. APMI/2025-26/01]
