SEBI OKs new asset class 'Investment Strategies' with INR 1 mln minimum cap
This story was originally published at 06:00 IST on 1 October 2024
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MUMBAI – The Securities and Exchange Board of India has given its nod to an investment product called 'Investment Strategies' to bridge the gap between mutual funds and portfolio management services in terms of flexibility in portfolio construction, the regulator said in a release after its board meeting Monday. "The new product also aims to curtail the proliferation of unregistered and unauthorized investment schemes/entities, which often promise unrealistic high returns and exploit investors' expectations for better yields, leading to potential financial risks," the SEBI said.
The minimum investment limit for the new product will be INR 1 million per investor across all investment strategies of the new product in a particular asset management company. "The new product is intended to add depth and variety to the investment landscape of the country through a new asset class," the release said.
Safeguards for the new product will include no leverage, no investment in unlisted and unrated instruments beyond those already permitted for mutual funds and derivatives, exposure limited to 25% of the assets under management for purposes other than hedging and rebalancing.
Investment Strategies is aimed at higher ticket sized investors with higher risk taking capability and will provide them a well regulated product with greater flexibility, while ensuring that all risk mitigating measures are in place, SEBI said. End
Reported by Kabir Sharma
Edited by Ashish Shirke
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