AMFI clarifies on new high-risk category of mutual funds

economictimes.indiatimes.com:

AMFI on Friday said the idea of introducing a new asset class, which lies between mutual fund and portfolio management services (PMS) and have flexible prudential norms, is at a «very nascent stage». «The discussion is at a very nascent stage and will go through the consultative approval process through the regulator,» the industry body said in a statement.
The statement came after media reports suggested that the Securities market regulator, the Securities and Exchange Board of India (Sebi), is in the process of formulating a new high-risk mutual fund category.
It was reported that the Association of Mutual Funds in India (AMFI) sought comments from asset management companies on the new mutual fund category. The proposed category is aimed at catering to investors with a high-risk appetite.

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Clarifying on the media reports, AMFI said that there is a whole spectrum of products in the securities markets in terms of the risks and the applicability of prudential norms.
«For instance, given the retail participation in mutual funds, prudential norms applicable to mutual funds are higher, as compared to other investment instruments, where prudential norms are flexible in line with ticket size of investment,» it added.
According to the industry body, there is a deliberation within the industry for an instrument that caters to investors who are looking for an intermediate investment product between mutual funds and PMS.
«The intent is to introduce a new asset class, which lies between a mutual fund and PMS, which may have flexible prudential norms, with a certain minimum ticket size. Hence, any comparison with AIF/PMS is