MONEY
SEBI board approves new asset class with minimum investment pegged at Rs 10 lakh
- IBJ Bureau
- Oct 01, 2024
The Securities and Exchange Board of India (SEBI) has approved the introduction of a new asset class to bridge the gap between mutual funds and portfolio management services (PMS).
The board of the capital market regulator, which met on Monday, gave the final go-ahead for the new product with the minimum ticket size pegged at Rs 10 lakh per investor across all investment strategies of the new product in a particular asset management company (AMC).
“Offerings under the new product will be referred to as ‘Investment Strategies’, to maintain clear distinction from the schemes offered under the traditional mutual funds. The minimum investment limit for the new product will be Rs 10 lakh per investor across all investment strategies of the new product in a particular AMC. The new product is intended to add depth and variety to the investment landscape of the country through a new asset class,” stated a release issued by the SEBI on Monday.
In July this year, the SEBI had released a consultation paper asking industry for feedback to launch a new asset class that would be between a portfolio management service and a mutual fund to allow investors with a higher investable amount to take more risk.
According to the consultation paper, this new asset class would be aimed at investors with investable surpluses of Rs 10-50 lakh, with a minimum entry requirement of Rs 10 lakh. The asset class would offer higher returns with greater risk. Investment strategies would include long-short equity funds, which involve taking both long and short positions, and inverse ETFs or funds.
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