The Securities and Exchange Board of India (SEBI) has issued Frequently Asked Questions (FAQs) on Specialized Investment Funds (SIFs), providing clarity on eligibility, minimum investment, transactions, redemption, risk, disclosures, and other investor-related requirements.
The following has been stated:
Minimum investment: Investors must maintain an aggregate investment of at least ₹10 lakh at the PAN level across investment strategies of a particular SIF. Accredited investors are exempt from this threshold.
Active and passive breach: If an investor-initiated transaction causes the investment to fall below ₹10 lakh, the units will be frozen for debit and the investor will get 30 calendar days to restore the threshold. If the threshold is not restored, the units will be automatically redeemed. A decline below ₹10 lakh solely due to a fall in NAV does not trigger compulsory redemption.
Transactions and redemption: SIFs may offer subscriptions, redemptions, switches, SIPs, STPs and SWPs, subject to the applicable Investment Strategy Information Document (ISID). Redemption frequency depends on the strategy, with equity-oriented strategies permitted to offer daily redemptions, while debt and hybrid strategies have prescribed minimum frequencies.
Redemption notice period: An AMC may prescribe a redemption notice period of up to 15 working days, depending on the structure and liquidity risk of the strategy. The applicable NAV will be determined as specified in the ISID.
Risk and disclosures: Each SIF investment strategy must carry a five-level Risk-band, from Level 1 (lowest risk) to Level 5 (highest risk). Portfolio and other disclosures, including derivative positions, are required at the end of every alternate month and must be made available within 10 calendar days.
Investor records: KYC, PAN, bank-account validation, nomination, FATCA/CRS and other applicable mutual fund onboarding requirements apply to SIF investors. SIF holdings and transactions are also reflected in the Consolidated Account Statement (CAS).
