Sebi proposes new asset class: MF-PMS hybrid
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MUMBAI: Markets regulator Sebi is proposing a “new asset class“, an investment product for rich investors that would be a hybrid product combining features of MF plans and portfolio management schemes.
Sebi is proposing a minimum investment threshold of Rs 10 lakh per investor for this product but no leveraging will be allowed. Investors can use derivative strategies other than for only hedging, Sebi said in a consultation paper published on Tuesday.
The new asset class is being launched to bridge the gap between MFs and PMS “in terms of flexibility in portfolio construction”, Sebi said.These products would allow investors to take higher risks at a higher ticket size within a regulated investment environment, “aimed at curbing the proliferation of unregistered and unauthorised investment products”.
At present, the minimum investment threshold in MFs is Rs 500 per investor while in PMS, it’s fixed at Rs 50 lakh. The proposed new asset class will be something in between the two.
“The proposed new asset class intends to fill the gap between MFs and PMS by offering a regulated product featuring greater flexibility, higher risk-taking capability and a higher ticket size to meet the needs of the emerging category of investors,” the consultation paper noted.
Sebi is proposing that all fund houses with an average asset under management of Rs 10,000 crore over three previous years and without any major regulatory sanctions could launch such products.
Sebi is proposing a minimum investment threshold of Rs 10 lakh per investor for this product but no leveraging will be allowed. Investors can use derivative strategies other than for only hedging, Sebi said in a consultation paper published on Tuesday.
The new asset class is being launched to bridge the gap between MFs and PMS “in terms of flexibility in portfolio construction”, Sebi said.These products would allow investors to take higher risks at a higher ticket size within a regulated investment environment, “aimed at curbing the proliferation of unregistered and unauthorised investment products”.
At present, the minimum investment threshold in MFs is Rs 500 per investor while in PMS, it’s fixed at Rs 50 lakh. The proposed new asset class will be something in between the two.
“The proposed new asset class intends to fill the gap between MFs and PMS by offering a regulated product featuring greater flexibility, higher risk-taking capability and a higher ticket size to meet the needs of the emerging category of investors,” the consultation paper noted.
Sebi is proposing that all fund houses with an average asset under management of Rs 10,000 crore over three previous years and without any major regulatory sanctions could launch such products.
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