SEBI has given the green light for mutual funds to introduce Specialized Investment Funds (SIF) starting from April 1.
For fund houses to be eligible to launch SIFs, they must have been in operation for a minimum of three years with an average AUM of ₹10,000 crore or more in the last three years. Alternatively, funds can qualify if they appoint a chief investment officer with at least 10 years of experience managing an average AUM of ₹5,000 crore or more.
While the AMC can share resources for operations between their mutual fund and SIF, the latter must have a distinct brand name and separate website.
Three types of equity-oriented strategies are permitted, including two types of long-short funds with up to 25 per cent short exposure through derivatives, and a sectoral long-short fund that invests at least 80 per cent in up to four sectors with up to 25 per cent short exposure at the sector level. Two debt and two hybrid schemes are also allowed.
SIFs can be open-ended, close-ended, or interval-based, and must adhere to a single-tier benchmark structure with an optional second tier. Equity funds should be benchmarked against indices like Nifty, Sensex, BSE 100, and CRISIL 500, while debt funds can be benchmarked against suitable broad market indices.
Offer documents are required to outline redemption rules, derivative exposure, and liquidity risks. Portfolio disclosures must be made every alternate month, including information on derivative positions and scenario analysis to demonstrate potential losses due to market movements.
Published on February 27, 2025.
