The Securities and Exchange Board of India (Sebi) had floated a consultation paper on introduction of ‘New Asset Class’ on Tuesday.
The aim of introducing this asset class is to bridge the gap between mutual funds and Portfolio Management Services (PMS) in terms of flexibility in portfolio construction.
This will help the regulator curtail movement of big-ticket investors towards unregistered and unauthorised investment schemes or entities.
The regulator has invited public to share their views on this topic by August 6, 2024 by latest.
A minimum investment of Rs 10 lakh for the new asset class, which could be permitted to invest in derivatives for purposes beyond just hedging and rebalancing was suggested by the regulator.
This higher threshold will deter retail investors from investing in this product, while attracting investors, with investible funds between Rs 10 lakh and Rs 50 lakh, who are being drawn to unauthorised and unregistered portfolio management service providers.
