SEBI has allowed mutual funds to launch Specialized Investment Funds (SIF) from April 1.
This is provided the fund houses have been in operation for at least 3 years with average assets under management (AUM) of ₹10,000 crore or more in the immediately preceding three years. Alternatively, funds that appoint a chief investment officer who has a 10-year of experience and has managed an average AUM of ₹5,000 crore or more can take this route.
The AMC may share resources for operations across their mutual fund and SIF, but the latter will have a distinct brand name and separate website.
Three types of equity-oriented strategies are allowed. This includes two types of long-short funds that can take up to 25 per cent shorts exposure via derivatives and a sectoral long-short fund that invests at least 80 per cent in up to four sectors and allows 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 follow a single-tier benchmark structure (with an optional second tier). Equity funds must be benchmarked against indices like Nifty, Sensex, BSE 100, and CRISIL 500. Debt funds can be benchmarked against suitable broad market indices.
Offer documents must detail redemption rules, derivative exposure, and liquidity risks. Portfolio disclosures are mandatory every alternate month and must include derivative positions and scenario analysis to show potential losses due to market movements.