New asset class may take wing

September 25, 2024 09:30

The Securities and Exchange Board of India (Sebi) may clear the decks for the launch of a new asset class -- aimed at bridging the gap between mutual funds (MFs) and portfolio management services (PMS) -- along with the MF Lite framework for passive fund houses.

The decision is likely at Sebi's upcoming board meeting on September 30, sources said.

Typically, the Sebi board -- which has representatives from the government and the Reserve Bank of India -- meets once every quarter to clear securities market-related reforms.

The new product category will cater to investors willing to take riskier bets. The minimum ticket size for such investments will be Rs 10 lakh, lower than the minimum threshold of Rs 50 lakh specified for PMS.

However, clear differentiation and upfront disclosures may be mandated for the new category to avoid confusion for investors. Existing MF players will be allowed to launch the new asset class. Sources said in anticipation of the new norms, several players have started putting in place a team and zeroed in on the strategies they plan to offer.

"Several large MF houses are already on the hunt for investment managers and team members for the new asset class as it will require a specialised set of teams for such strategies," said an industry player.

-- Khushboo Tiwari/Business Standard

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