New Delhi: SEBI approves new asset class, no change in the rules of index derivatives. Loktej Business News
New Delhi, 1 October (Hindustan Reporter). Market regulator Securities and Exchange Board of India (SEBI) has not made any changes in the rules of index derivatives, ignoring all the possibilities and apprehensions. However, SEBI has proposed to allow weekly contracts for one index of any one exchange at present. It is being said that if this proposal is approved, then the first phase of the system of two expiry in a week will start. With this, the governing body of SEBI has approved the introduction of a new asset class to bridge the gap between mutual funds and portfolio management services.
It is noteworthy that on July 30, SEBI had issued a consultation paper and proposed to make some changes in the rules of index derivatives to increase stability in the stock market and keeping in mind the protection of small investors. The proposal called for increasing the contract size by at least four times, collecting option premium immediately and reducing the number of weekly contracts.
Under the current system, there is a provision for index based contracts, which have daily expiry. In this system the risk for small and retail investors is quite high. In a recent report of SEBI, it was also revealed that 93 percent of small investors have faced losses in such deals. For this reason, the Working Committee related to Futures and Options had given some suggestions for changes in the rules of index derivatives. On the basis of these suggestions, SEBI had included its proposals in the consultation paper on July 30, due to which it was being estimated that SEBI was serious about implementing the new framework based on the recommendations of the Market Regulator Working Committee. Is.
However, in a major decision, the governing body of SEBI has approved the proposal to introduce a new asset class to bridge the gap between mutual funds and Portfolio Management Services (PMS). SEBI’s governing body has given the green signal to the new asset class with a minimum ticket size of Rs 10 lakh per investor. Under this, a new product can be introduced under the investment strategy in Asset Management Company (AMC).
According to the information provided by SEBI, the offer offered under the new product will be considered as an investment strategy, so that it can be kept different from the schemes offered under traditional mutual funds. The minimum limit of investment for the new product will be Rs 10 lakh per investor under all investment strategies in the asset management company. The aim of this new product is to add better options to the investment scenario of the country through a new asset class.
In the consultation paper released by SEBI in July this year, opinions were also sought regarding the launch of a new asset class. This asset class will be between Portfolio Management Service (PMS) and Mutual Fund, so that investors can take more risk and invest larger amount in it. The objective of this new asset class is to provide investment options to investors in the range of Rs 10 to Rs 50 lakh. That is why the minimum limit of investment has been kept at Rs 10 lakh. This asset class will offer comparatively higher returns. However, the risk in this will also be comparatively higher.
