SEBI New Product
The Securities and Exchange Board of India (SEBI) is considering creating new options for investors with investments between Rs 10 lakh and Rs 50 lakh. Its aim is to eliminate the difference between mutual funds and portfolio management services (PMS). SEBI said on Tuesday that the new investment product will provide a regulated means to meet the needs of the emerging new category of investors. This product will be more flexible and have the feature of high-risk taking capacity.
Minimum investment of Rs 10 lakh
According to SEBI, the minimum amount for investment under the new asset category can be Rs 10 lakh per investor. SEBI said in its consultation paper that this limit will discourage retail investors from investing in this category and will attract investors with investable funds between Rs 10 lakh and Rs 50 lakh. It will also prevent investment in such products which are being issued by unauthorized and unregistered portfolio management service providers. The proposed new asset class aims to curb the spread of unregistered and unauthorized investment products.
What will the product be like
It says that it is proposed to introduce the new asset class under the mutual fund (MF) structure. Prudential norms will be relaxed to make such a new asset category sufficiently effective. The consultation paper says that although such relaxation may increase the risks associated with the product, it can be reduced by imposing a high limit on the minimum investment size.