Sebi Explores New Asset Class for High-Risk Investors

Sebi Explores New Asset Class for High-Risk Investors

VoM News Desk | December 8, 2023 | 04:39 PM IST | Breaking News | Follow on Google News

Sebi Explores New Asset Class for High-Risk Investors Image/Mint

Sebi Explores New Asset Class for High-Risk Investors

The Securities and Exchange Board of India (Sebi) is considering the introduction of a new asset class positioned between portfolio management services (PMS) and mutual funds. Sebi Chairperson Madhabi Puri Buch disclosed this during the Confederation of Indian Industry’s Global Economic Policy Forum.

The proposed asset class is anticipated to cater to investors with a high-risk appetite and may feature a higher minimum investment along with relaxed norms to yield elevated returns. Buch highlighted ongoing discussions with industry stakeholders to shape the characteristics, benefits, and risk mitigation strategies for this new category.

Additionally, Sebi is working on a roadmap to achieve same-day settlement of trades by March 2024, with an optional parallel system for instant settlement.

The move towards a T+0 settlement cycle is expected to enhance efficiency, providing investors with quicker transaction settlements. Currently settled on ‘T+1’ (one day after initiation), the shift to T+0 would enable same-day settlements, ultimately progressing towards instant settlements.

This initiative positions India to become the second country, after China, to operate on a one-day settlement cycle, outpacing most major economies where settlements typically take two days.

Buch also noted Sebi’s engagement with investors, including foreign entities such as pension funds, to facilitate investments in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

Recognizing REITs and InvITs as advantageous for retail investors due to their potential to provide inflation-proof income, she emphasized the government’s interest in securing more funding through these instruments.

Sebi recently approved a framework to support small and medium-sized REITs, aligning with efforts to streamline regulations for these investment avenues.

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VoM News Desk

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