SEBI Proposes New Asset Class to Expand Investment Options

The Securities and Exchange Board of India (SEBI) proposes a new asset class aimed at investors with investible funds between Rs 10 lakh and Rs 50 lakh. This initiative seeks to bridge the gap between mutual funds and portfolio management services, providing greater flexibility and higher risk-taking capability.

The Securities and Exchange Board of India (SEBI) on Tuesday unveiled a proposal to introduce a new asset class. This asset class aims to attract investors with investible funds ranging from Rs 10 lakh to Rs 50 lakh.

The initiative seeks to fill the gap between mutual funds and portfolio management services (PMS), providing a regulated product that offers greater flexibility and higher risk-taking capability. According to SEBI, the minimum investment amount for the new asset class should be Rs 10 lakh per investor. This threshold will discourage retail investors while drawing attention of those currently engaged with unauthorised PMS providers.

This move aims to curb the proliferation of unregistered investment products and will be positioned under the mutual fund (MF) structure, albeit with relaxed prudential norms to make it more effective. The Securities and Exchange Board of India has invited public comments on this proposal until August 6.

(With inputs from agencies.)