Sebi raises minimum level for portfolio investments

January 28th, 2012 - 8:39 pm ICT by IANS  

New Delhi, Jan 28 (IANS) The Securities and Exchange Board of India (Sebi) Saturday hiked the minimum investment level under portfolio management schemes to Rs.25 lakh from the current level of Rs.5 lakh.

The decision was taken at a board meeting of the market regulator held here.

The board decided to amend the Sebi (portfolio managers) regulations, 1993 to give effect “to enhance the minimum investment amount per client from Rs.5 lakh to Rs.25 lakh,” according to an official statement released after the meeting.

The amendment also ensures segregation of holdings in individual demat accounts in respect of unlisted securities.

Talking to reporters after the board meeting, Sebi Chairman U.K. Sinha said the existing investments would not be affected from the amendments as it will be applicable on prospective basis.

“The proposed amendment would be applicable on prospective basis for new clients and for fresh investments by existing clients.”

The regulator also decided to relax investment norms by waiving the six-month lock-in period for insurance companies and mutual funds participating in preferential allotment of shares.

“It has been decided to exempt insurance companies and mutual funds which are broad based investment vehicles representing the interests of the public at large from the provisions of Sebi regulations relating to sale and lock-in of their pre-preferential shareholding in the issuer company.”

Currently, Sebi regulations preclude companies from issuing preferential allotment to entities who have sold any of their holdings during the six month period prior to relevant date.

Further, allottees in preferential allotment are required to lock in their entire pre-preferential holdings for a period of six months from the date of preferential allotment.

“The lock-in on shares allotted in preferential issue per se, however, would remain unchanged,” Sebi said.

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