Brokerages ask Sebi for relaxing rules on basket investment plans

Brokerages have asked the Securities and Exchange Board of India (Sebi) for relaxing the rules on the so-called basket investment plans they offer. These products currently do not have a regulatory framework and brokerages market these to customers as long-term investment products, on the lines of the systematic investment plans (SIPs) offered by mutual funds (MFs).

However, an issue arises when the broker decides to remove an existing stock or introduce a new one into the basket. In such a scenario, the basket plan would be considered a portfolio management service (PMS) under Sebi rules, subject to several trade restrictions