Market regulator Securities and Exchange Board of India (Sebi) approved a new asset class on Monday, allowing high-net-worth investors to invest in riskier regulated products.
The new asset class is to have a minimum investment amount of Rs 10 lakh.
The offerings under the new product will be referred to as ‘Investment Strategies’, to maintain a clear distinction from the schemes offered under the traditional mutual funds. The new product is intended to add depth and variety to the investment landscape of the country through a new asset class.
Sebi floated a consultation paper on introducing a ‘New Asset Class’ in July, inviting public comments by August 6, 2024.
The move is aimed at creating a new product that lies between mutual funds and portfolio management services (PMS), catering to investors with higher risk-taking capabilities and larger ticket sizes.
This was the first board meeting of the regulator following allegations of conflict of interest against chairperson Madhabi Puri Buch by US-based Hindenburg Research and India’s Congress party.
Among other important decisions, the regulator also approved rules for a new investment product under mutual funds. It introduced the liberalized Mutual Funds Lite (MF Lite) framework for passively managed schemes of mutual funds.
