Sebi issues mechanism for monitoring of minimum investment threshold under SIF

Markets regulator Sebi on Tuesday came out with a mechanism for monitoring compliance with minimum investment threshold under Specialized Investment Funds (SIF).

In case of any active breach of the threshold of Rs 10 lakh by an investor, including through transactions on stock exchanges or off-market transfers, Sebi said that all units of such investors held across investment strategies of the concerned SIF would be frozen for debit.

Besides, a notice of 30 calendar days would be given to such investors to rebalance the investments in order to comply with the threshold.


"In case an investor rebalances his/her investments in SIF within the notice period of 30 calendar days, the units of SIF of such investor shall be unfreezed, and no further action shall be taken with regard to compliance with minimum investment threshold," Sebi said in its circular.

If the investor fails to rebalance the investments within a 30 calendar day period, the frozen units will be automatically redeemed by the AMC, at the applicable Net Asset Value.

Specialized Investment Funds (SIFs), which allow mutual funds to launch advanced investment strategies as open-ended, close-ended and interval structures, will add depth and variety to the investment landscape of the country.

For the purpose of SIF, the 'Active Breach' would mean fall in the aggregate value of an investor's total investment across all investment strategies of SIF, below the Minimum Investment Threshold of Rs 10 lakh, on account of any transactions -- redemption, transfer, sale -- initiated by the investor.