The SEBI board may take up a host of proposals for its upcoming meeting on September 30.

The board may discuss the introduction of a new asset class with a minimum ticket size of ₹10 lakh. The threshold will deter retail investors from investing in the product, while attracting investors with investible funds of ₹10-50 lakh, who are currently being drawn to unregistered portfolio management service providers.

This may be offered under the MF structure, with a new branding and relevant relaxations in existing MF norms, to begin with.

The regulator may discuss new regulations for passively managed mutual funds under the so-called “MF Lite Regulations”. This proposal aims to establish a more flexible regulatory framework for passive funds, compared to the current regulations, which are primarily tailored for actively managed mutual funds.

SEBI may revise shareholding norms to allow more flexibility in the governance structure of passive mutual funds. This includes potential adjustments to the minimum net worth requirements for AMCs and reducing the lock-in period for sponsors’ shareholding, to attract serious players to the market.

Broadening scope

SEBI may look at broadening the scope of connected persons under the Prohibition of Insider Trading Regulations. The definition of ‘relative’ under PIT Regulations may be brought in line with the definition of ‘relative’ under Income Tax Act, 1961. Immediate relatives under PIT currently include spouse of that person, or any parent, brother, sister or child of the person or of the spouse. Under the IT Act, relative also includes any lineal ascendant or descendant of the individual.

The regulator’s board may also look to hike the net worth requirements of merchant bankers from the existing ₹5 crore. Two categories of bankers may be formed and those with a net worth of between ₹10 crore and ₹50 crore may not be allowed to handle mainboard issues.

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