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It attempts to restrict the rise of unlisted and unauthorized investment products in the market
With the aim of strengthening investor strategies and tightening regulatory control, the Securities and Exchange Board of India (SEBI) has put forth a new asset class with a minimum investment limit of Rs. 10 lakh per investor. This policy aims to narrow the gap between Mutual Funds (MFs) and Portfolio Management Services (PMS), creating a monitored product with increased risk-taking ability and a higher entry ticket size.
The proposed asset class outlined in the advisory note issued by SEBI aims to cater to the needs of a growing segment of investors by providing more flexibility in investment policies. It attempts to restrict the rise of unlisted and unauthorized investment products in the market. The regulator also plans to introduce a specific name for this asset class to differentiate it from existing investment vehicles such as MFs, PMSs, and Alternative Investment Funds (AIFs). Under the proposal, Asset Management Companies (AMCs) will be allowed to offer pooled investment options similar to the MF scheme, offering options such as Structured Investment Plans (SIPs) and Systematic Withdrawal Plans (SWPs) within the new asset class structure. Among the eligibility criteria for AMCs to offer products in this category are strict requirements for fund management experience and asset management track record.
SEBI’s move underscores its commitment to enhance investor protection and diversify investment options in the Indian securities market. The proposal is now open for public comment and investor feedback before final implementation.
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