Want to invest Rs 10-50 lakh in markets? SEBI may have a new offering for you

New Delhi: Markets regulator SEBI is mulling the introduction of a new asset class with an eye on the investor segment that has a Rs 10-50 lakh investment appetite, it said in a statement.

This asset class may sit between mutual funds and portfolio management services.

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All about new asset class planned by SEBI

SEBI said that the new asset class is likely to offer several advantages such as:

  • Greater flexibility
  • Higher risk ceiling
  • Higher ticket size

This asset class is likely to meet the needs of a newly emergent investor category, SEBI said. The entry price for this asset class is likely to be Rs 10 lakh, said the markets regulator. This is expected to protect retail investors with a lower risk appetite from taking outsized risks, added SEBI. “This threshold shall deter retail investors from investing in this product,” it said.

The new investment class will also attract investors who are being lured by spurious portfolio managers, added the markets regulator. With this asset class, SEBI aims to crack down on investment products that are unregistered and unauthorised.

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The new investment category will be introduced under the mutual fund umbrella, “with relaxations in prudential norms for such new asset classes to be adequately effective,” SEBI said. The risks linked to the relaxation of norms will be mitigated by keeping the minimum investment at a higher price point, it added. SIPs may be allowed in the new asset class with allowance for investment in derivatives.

This investment class will have a new name that is distinct from existing investment avenues such as:

  • PMS
  • Alternative investment funds
  • REITs
  • INVITs

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