Market regulator Securities and Exchange Board of India (Sebi) on Tuesday notified a new asset class between portfolio management services (PMS) and mutual funds and referred to it as ‘Specialized Investment Fund’ (SIF). The SIF asset class will accept investments of Rs 10 lakh or more from the investors across all investment strategies.

However, the requirement of minimum investment amount will not apply to an accredited investor. The fund manager of Specialized Investment Funds will be required to have the relevant NISM certification.

Bạn đang xem: Sebi notifies SIF, new asset class between PMS and mutual funds with minimum investment of Rs 10 lakh

The notification comes as part of the amendment made to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

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The investment strategy in SIF could be an open-ended investment strategy or close-ended investment strategy or interval investment strategy with subscription and redemption frequency appropriately disclosed in the offer document.

The fees and expenses for the investment strategies launched under the SIF shall be in accordance with Regulation 52 of the mutual fund regulations.

The new SIF regulations also put restrictions on investments such as an investment strategy cannot invest more than 20% of its NAV (net asset value) in debt instruments comprising money market instruments and non-money market instruments issued by a single issuer and are not investment grade.However, the investment limit may be extended to 25% of the NAV of the investment strategy with the prior approval of the Board of Trustees and Board of Directors of the asset management company.Government securities, treasury bills and triparty repo on Government securities or treasury bills are exempt from these restrictions.

Moreover, no SIF under all its investment strategies should own more than 15% of any company’s paid up capital carrying voting rights.

For e.g. if a mutual fund under all its schemes owns 10% of any company’s paid up capital carrying voting rights, then the SIF under all its investment strategies cannot own more than 5% of that company’s paid up capital carrying voting rights.

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No investment strategy of a SIF can invest more than 10% of its NAV in the equity shares and equity-related instruments of any company.

An SIF can invest in the units of REITs and InvITs with certain caveats. One is that no SIF under all its investment strategies can own more than 20% of units issued by a single issuer of REIT and InvIT. This limit should be inclusive of 10% limit for mutual fund scheme as specified under clause 13 (a) of Seventh
Schedule.

The regulator had in July proposed this new asset class for investors with higher risk taking capabilities.

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