Investment risks: Keeping accredited investors safe

By Rajiv Bajaj6 days ago

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An accredited investor with a good investment advisor would be able to navigate market related risks in direct plans of mutual funds, PMS, AIF and other structures

A single asset manager would never be able to step forward and highlight underperformance in its schemes, as compared to its peers, a major conflict of interest which retail investors are currently exposed to.

We welcome the long-awaited move by Sebi to come up with accredited investor guidelines. An accredited investor is someone who has qualification and experience to navigate the highly volatile and higher risk bearing asset classes such as equities, real estate as well as structures like derivatives.

As defined by Sebi, accredited investors is a class of investors who have an understanding of various financial products and the risks and returns associated with them and therefore, are able to take informed decisions regarding their investments. Accredited investors are recognised by many securities and financial market regulators around the globe.

Regulatory protection

These investors are considered sophisticated enough to not require extensive regulatory protection. They are allowed certain relaxations given their ability to bear higher market and financial risks.

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