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News: The newly introduced Specialised Investment Funds (SIFs) have crossed ₹13,814 crore in assets under management (AUM) after the framework was introduced.
About Specialised Investment Funds (SIFs)
- Specialised Investment Funds (SIFs) are pooled investment products that provide greater flexibility for managing advanced investment strategies.
- Introduced by: It is introduced by Securities and Exchange Board of India (SEBI), through a circular dated February 27, 2025.
- Legality: It operate under the SEBI (Mutual Funds) Regulations, 1996.
- Effective from: The SIF framework became effective from April 1, 2025.
- Objective: SIFs were introduced to bridge the gap between traditional Mutual Funds (MFs) and Portfolio Management Services (PMS) by providing greater investment flexibility with regulatory safeguards for sophisticated investors.
- Eligibility criteria:
- Investor eligibility: Investors must invest at least ₹10 lakhs per PAN across all strategies of a particular Asset Management Companies (AMC), while accredited investors are exempted from this requirement.
- AMC eligibility: Only SEBI-registered Asset Management Companies (AMCs) can launch SIFs through either the sound track record route or the alternate route, subject to the prescribed experience, AUM, and regulatory conditions.
- Categories of Investment:
- Long-short strategy: SIFs allow directional long-short equity exposure.
- Derivative strategy: They permit derivative strategy exposure up to 25% of NAV.
- Multi-asset strategy: They allow multi-asset or hybrid allocations combined with derivative exposure.
- Key features:
- Transparency: Every scheme provides an Investment Strategy Information Document (ISID), risk band from 1 to 5, and scenario analysis of expected losses.
- Risk controls: SIFs limit sector exposure to 25% of NAV and prescribe issuer-wise and derivative exposure limits.
- Liquidity: SIFs can be offered as open-ended or closed-ended investment products.
- Distribution: SIFs require distinct branding, and distributors must possess SEBI-mandated National Institute of Securities Markets (NISM) certification.
