SEBI Proposes New Investment Avenue for HNWIs
The Securities and Exchange Board of India (SEBI) aims to introduce a new investment category tailored for high net-worth individuals. Dubbed the “Ultra Asset Class”, it aims to fill the gap between traditional mutual funds and portfolio management schemes.
Key details revealed suggest SEBI’s goal is to provide a regulated product for investors willing to take on higher risk for potentially higher returns. The minimum investment threshold proposed is Rs. 10 lakh per individual, significantly higher than typical mutual funds.
If introduced, the Ultra Asset Class would offer flexibility beyond regular funds. Specialized strategies could include those taking long and short equity positions or inversely correlating to indices. Redemption frequencies may also vary based on the nature of underlying investments.
SEBI has outlined two routes for existing and new AMCs to offer these products. Well-established names with over Rs. 10,000 crore average AUM and no regulatory issues in recent years would qualify. Others may appoint experienced Chief Investment Officers and additional fund managers.
The Ultra Asset Class aims to curb the proliferation of unregistered high-risk products lacking transparency. By regulating an innovative new category, SEBI hopes to cater to sophisticated investors seeking higher involvement alongside rewards. Its proposals could transform the asset management space if implemented as envisioned.
