SEBI is all set to introduce a new investment scheme between mutual funds and portfolio management services (PSS). SEBI has sought suggestions from experts for this. It is indicated that the new investment will be a hybrid of both investments.
The minimum investment limit for this scheme is Rs 10 lakh. This allows investors to make high investments by taking high risks in a controlled manner.
Currently, the minimum investment in mutual funds is Rs 500. At the same time it is 50 lakhs in PMS. The new scheme aims to make more gains for ordinary investors by investing in the meantime.
Branding and advertising will differentiate the new investment scheme from traditional mutual funds.
Fund houses can introduce
SEBI has proposed to allow fund houses with average assets under management of Rs 10,000 crore or more in the last three years to introduce such products without seeking special permission. Asset Management Companies (AMCs) with assets of Rs 5,000 crore and ten years of operational experience may be considered.
Derivative transactions for purposes other than hedging and portfolio rebalancing may also be permitted subject to conditions. Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP) may also be included in the scheme.
It is suggested that the new scheme may allow more relaxations in the norms currently applicable to mutual funds.
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