The Securities and Exchange Board of India (Sebi) is planning to limit investor's exposure to shares and equity derivatives in line with their net worth, said three people with knowledge of the development. The move is aimed at preventing individuals from going overboard on equity investments, considered riskier than bonds.
The proposal is similar to the concept of accredited investors in some developed markets. An accredited investor is one who meets requirements regarding income, net worth, asset size, governance status or professional experience. The US regulator has adopted requirements for accredited investors to protect those who may be unable to sustain the economic risk of investing in unregistered securities. The proposal, if implemented, could impact a number of equity investors. (Source : Economic Times)