SEBI Introduces New Asset Class for High-Risk Investors

Capital markets regulator SEBI has approved a new asset class aimed at high-risk profile investors. This product bridges the gap between mutual funds and portfolio management services, requiring a minimum investment of Rs 10 lakh. It aims to offer better-regulated alternatives to unauthorized investment schemes.

Capital markets regulator SEBI on Monday approved a proposal to introduce a new asset class designed for high-risk profile investors. The initiative aims to bridge the gap between mutual funds and portfolio management services, offering greater flexibility in asset construction.

Under the new asset class, a minimum investment of Rs 10 lakh per investor is required across all investment strategies within a particular Asset Management Company (AMC). This product also aims to curtail the proliferation of unregistered and unauthorized investment schemes which often promise unrealistic returns and pose financial risks.

The new asset class will feature Systematic Investment Plan (SIP) options, higher risk-taking capability, and a larger ticket size to attract investors with funds between Rs 10 lakh and Rs 50 lakh. It is designed to deter retail investors while providing a regulated investment avenue for higher net-worth individuals. Key safeguards include no leverage, limits on unlisted and unrated instruments, and restricted derivatives exposure.

(With inputs from agencies.)