Existing products serve retail, high-net-worth, institutional investors, with regulations becoming more flexible from mutual funds (MFs) to portfolio management services (PMS) to alternative investment funds (AIFs) based on investment profiles, sizes.
SEBI has identified a gap between MFs and PMS in terms of portfolio flexibility, leading to the introduction of SIF through revisions to the SEBI (mutual funds) regulations.
SIF Framework
The comprehensive regulatory framework for SIF is provided in Annexure A.
The framework covers matters including eligibility criteria for establishing such funds; branding and advertisement requirements; permitted investment strategies.
Minimum investment threshold and treatment of violations; investment restrictions; investments in derivatives; subscription, redemption of units of investment strategies.
Listing of units; strategy benchmarking; SIF distribution; disclosure within offer documents; risk-band requirements; and other requirements concerning disclosure.
Effectiveness
While the published circular will come into effect from Apr. 1, 2025, IND MF is required to publish the necessary associated guidelines/standards by Mar. 31, 2025.
In addition, stock exchanges, clearing corporations, and depositories are required to take appropriate steps to implement the circular such as revising bye-laws.
