India lets wealth-focused funds with US$463 billion invest abroad
The changes significantly expand options for an industry that has grown rapidly in recent years
The Securities and Exchange Board of India (Sebi) has expanded investment options for the wealthy portfolio management industry, allowing a segment worth $463 billion to invest in overseas securities and short equity options. The overhaul permits portfolio managers to engage in unhedged short positions and invest in unlisted debt securities, as well as take derivatives exposure up to 1.25 times clients' assets.
The changes aim to cater to wealthy Indians seeking customized, professionally managed products. The industry, known as portfolio management services (PMS), saw a growth from 40 trillion rupees in the previous year to 44.4 trillion rupees as of August. The move also provides another route for wealthy Indians to access global markets, where there is a surge in demand for artificial-intelligence stocks.
The new rules follow a consultation paper released by Sebi and come amid foreign outflows pressuring the rupee against the US dollar.
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