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About SIF:

A Specialized Investment Fund (SIF) is an SEBI-regulated investment option in India, designed for high-net-worth and sophisticated investors with a minimum investment of ₹10 lakh. Unlike traditional mutual funds, SIFs offer more investment flexibility, including the use of derivatives and less liquidity, but also involve higher risk. They are taxed similarly to mutual funds but provide access to strategies, asset classes, and risk-return profiles not available in conventional mutual funds. 

1.What is a Specialized Investment Fund (SIF)?

A Specialized Investment Fund (SIF) is a new asset class introduced by SEBI, positioned between portfolio management services (PMS) and mutual funds, accepting investments of ₹10 lakh or more and offering advanced investment strategies.

2. Who can invest in a SIF?

• Retail investors 
• High-net-worth individuals (HNIs)
• Accredited investors (may have relaxed thresholds)
• Institutional investors looking for bespoke strategies

3.How did Specialized Investment Funds Originate?

SEBI (Securities and Exchange Board of India) introduced Specialized Investment Funds (SIFs) to meet the evolving needs of India’s financial ecosystem. In India, the concept of Specialized Investment Funds originated as part of the broader effort to promote newer investment alternatives that go beyond traditional mutual funds and combines the advantages of an AIF/PMS.

4.What are the different types of Specialized Investment Funds?

Specialized Investment Funds are currently classified into:

• Equity Oriented Investment Strategies
• Equity Long-Short Fund
• Equity Ex-Top 100 Long-Short Fund
• Sector Rotation Long-Short Fund
• Debt Oriented Investment Strategies
• Debt Long-Short Fund
• Sectoral Debt Long-Short Fund
• Hybrid Investment Strategies.
• Active Asset Allocator Long-Short Fund
• Hybrid Long-Short Fund

5.How to invest in quant Specialized Investment Fund?

Applications for allotment of SIF units should be made in the prescribed form only. Cheques / DDs should be drawn in favour of "the respective scheme" names.

6.Why are bank account details mandatory?

In order to protect unit holder interest from fraudulent encashment of cheques, the current SEBI Regulations has made it mandatory for investors to mention in their application/repurchase-redemption request, the bank name and account number of the unit holders. The AMC will not be responsible for any loss arising out of fraudulent encashment of cheques and or any delay /loss in transit. In the absence of these details, applications are liable for rejection.

7.What will investors receive as proof of investment?

• Every unit holder of the Scheme will have an account number allotted to him and a statement of account of the units to the credit of his account will be issued.
• For any investments made during the initial offer period the statements of account will be issued to all investors within 10 days after the closure of the offer. After the scheme reopens for subscription investors will be issued a statement of account detailing the number of units allotted. The Fund will endeavor to issue the statement of account within 5 business days after processing of the application. A fresh statement of account will be issued after every partial encashment / declaration of dividend / issue of bonus units / further purchase of units giving the total number of units standing to the investors’ credit. On every such operation the previous statement of account shall automatically stand cancelled.
• In addition, each unit holder will also receive an annual account statement as soon as practicable after 31st March each year which will detail the investors opening unit balance as of 1st April of the prior year, all transactions that occurred during the preceding twelve months and the closing balance of units held as of 31st March.
• No unit certificate will be issued under the scheme. However, in case of a specific request unit certificate may be issued within 6 weeks from the receipt of request from the investor at the appropriate authorized center. 

8.How will investors be allotted units in the scheme?

Allotment of units will be made after realization of Cheque/DD for the amount invested depending upon the NAV of the units, subject to the prevailing load structure in fractional Units up to 3 decimals. 

9. Can investors appoint nominees for their investments in SIF units?

Yes. Nominations may be made by individuals applying for or holding units on their own behalf, either singly or jointly. Those who cannot nominate are - Non-individuals including societies, trusts, corporate bodies, partnership firms, Kartas of Hindu undivided families, or holders of power of attorney.

10. Where can investors track the NAV?

The NAV shall be calculated everyday including holidays and declared on each business day in accordance with the SEBI guidelines on SIF from time to time and will be displayed / available at the Corporate office, Registrar’s office and other Authorized Centers such as the Area Offices. The NAV along with the sale and repurchase prices will also be published in at least 2 daily newspapers along with the sale and repurchase price on all business days’ accordance with SEBI guidelines, and made available on our website and AMFI website on a daily basis.

11. How do investors redeem their units?

Investors may redeem their entire holdings either in full or in part. Investors have also the option to request the redemption:

a . of a Specified amount in Rupees

or

b. Of a Specified number of Units of the Scheme

Where the redemption request is for both a specified amount and for a specified number of units, the Specified Unit request is considered as definite. In case of a Specified request for an amount in rupees the number of units to be redeemed will be determined on the basis of the applicable repurchase price. Similarly where the request is for a specified number of Units for redemption, the redemption amount payable will be the number of units multiplied by the applicable repurchase price. Where the request for redemption exceeds the holdings of the Unit holders, the account of the Unit holder will be closed and the entire holding to the investor’s credit will be redeemed at the applicable repurchase price.

Repurchase/ redemption shall be effected on receipt of the repurchase/ redemption request along-with the duly discharged Statement of Account mentioning the number of units offered amount sought for repurchase/ redemption at the authorised centre where the Units were originally purchased. The new statement of account, mentioning the units outstanding to the credit of investor, if any, will be sent to the investor separately and upon its receipt all previous statements of account will automatically stand cancelled.

On complete redemption of the holdings the investor’s ceases to be a member of the Scheme and would not be entitled to any further benefits from the Scheme.

12.How is Repurchase / Redemption done by NRIs/PIOs?

Repurchases / Redemptions By NRI’s / PIO’s will be in accordance with the conditions mentioned above subject to any procedures laid down by the RBI if any.

Payment to NRI’s / PIO’s will be subject to relevant laws / guidelines of the RBI as are applicable from time to time.

Subject to RBI approval, in case of NRI unitholders the amounts due on redemption / repurchases (subject to tax deduction at source) will be credited to the NRE / FCNR account of the investor where the original investment in the units was made on repatriation basis by an NRI either through inward remittance or debit to NRE/FCNR account.

In all other cases the amounts due on redemption / repurchases (subject to tax deduction at source) will be paid by means of a rupee cheque payable at the NRO/NRSR account of the investor as applicable.

13.What is a Load structure?

Load is an amount that is paid by the investor to subscribe to the units or to redeem the units from the scheme. This amount is used by the AMC to pay commissions to the distributor and to take care of other marketing and selling expenses. Load amounts are variable and are subject to change from time to time. 

14.What is a Systematic Investment Plan?

Investors will have the opportunity to plan their further investments and withdrawals from the scheme via the SIP/SWP. They can invest or withdraw regularly, at a specific frequency (subject to the other provisions of the schemes) thus benefiting from the economics of average cost of purchase and sale. They can further invest a fixed sum of money, a minimum of Rs. 10,000 and multiples of Re. 1 thereafter. In qSIF, the first transaction has to be of minimum Rs. 10 lacs across all qSIF strategies after which a SIP of minimum Rs. 5 lacs can be initiated.

15.What is a Systematic Withdrawal Plan?

SWP is a facility given to the Unit holders to withdraw amounts from the Scheme on periodic basis by giving a single instruction. In a SWP the investors can redeem a fixed sum/ number of units subject to compliance with the minimum investment threshold of Rs. 10 lacs. An investor has to have a minimum balance of specified no. of units or specified amount at all times which is Rs. 10 lacs. The default SWP date will be 2nd of every month (in case it falls on a non-business day, the transaction will be effected on the next business day of the Scheme). The SWP frequency is monthly. The Load Structure prevailing at the time of submission of the SIP/STP/SWP application will apply for all the installments indicated in such application. In qSIF, the first transaction has to be of minimum Rs. 10 lacs across all qSIF strategies.

16.What are your rights as an investor? What resource do you have to your grievances?

Unitholders under the scheme have a proportionate right in the beneficial ownership of the assets of the mutual fund under the scheme.

The unitholders have a right to ask the trustee company/board of trustees about any information which may have an adverse bearing on their investments, and the trustees shall be bound to disclose such information to the unitholders.

The appointment of the Asset Management Company in respect of this scheme may be terminated by a majority of Trustees or 75% of the unitholders.

Units of the scheme are generally non-transferable. However, transfer of units, in cases outlined under the heading Transferability/ Transmission of units and subject to conditions stated therein, shall be made within 30 days from the date of lodgment.

Warrants in respect of dividends, if declared, will be dispatched to the unitholders within 30 days of the declaration of dividend if any.

Redemption or repurchase warrants will be dispatched within 10 working days from the date of their receipt of request duly complete in all respects by the appropriate Office.

The Trustees may, from time to time, add to or otherwise amend or alter all or any of the terms of this scheme, for duly complying with the guidelines of Government, RBI/SEBI or any other regulatory body or in the interest or convenience of the Fund or the unit holders. and any modification of the fundamental attributes of the scheme, or the trust or the fees and expenses payable or any other modification by the Trustees shall be made bearing in mind that the interest of the unit holders is not affected and no change in any of the above shall be carried out unless:–

A written communication about the change is sent to each unit holder and an advertisement is given in one English daily newspaper having nation-wide circulation as well as in a newspaper published in the language of the region where the Head office of the Mutual Fund is situated; and

The unit holders are given an option to exit at prevailing NAV without any exit load.

An Abridged scheme wise annual report shall be mailed to all unitholders not later than 6 months from the date of closure of the relevant accounting year and the full annual report shall be available for inspection at the corporate office of Mutual Fund and a copy shall be made available the unitholders on request on payment of nominal fees, if any.

17.What is the minimum investment required for SIFs?

The minimum investment required for SIFs is ₹10 lakhs, but this may not apply to the following accredited investors. For qSIF, the minimum amount for accredited investors is ₹1 lakh.

Accredited investors:
How to invest in quant Specialized Investment Fund? Individuals, HUFs and Family: Annual Income >= ₹2 crores OR Annual income > ₹1 crore + Net Worth > (Financial Assets >= ₹2.5 crores) OR Net Worth >= ₹7.5 crores (Financial Assets >= ₹3.75 crores)

Trusts other than Family Trusts:Net Worth >= ₹50 crores

Body Corporates: Net Worth >= ₹50 crores

18.What are the investment strategies available under SIFs?

SIFs can adopt open-ended and interval investment strategies, with subscription and redemption frequencies disclosed in the offer document.

19. What makes SIF different?

SIFs can take long and short positions, benefiting from rising and falling markets. Unlike mutual fund schemes, which can use derivatives only for hedging, SIFs can deploy them as core investment tools. SIFs enjoy higher flexibility by adopting investment approaches like market-neutral strategies and concentrated positions, which are unavailable under traditional investment products.

20. Who can manage Specialized Investment Funds?

Experienced fund managers execute the strategies and SIFs adhere to SEBI’s reporting and disclosure norms.

21. What about expense structure for SIFs?

SIFs follow the same expense structure as Mutual Fund

22. What is the taxation structure applicable to SIF?

The taxation structure for SIFs will be similar to that of mutual funds

23. Can SIFs invest in REITs and InvITs?

Yes, SIFs can invest in REITs and InvITs, but no single issuer can exceed 20% of their NAV across all strategies, which is higher than the 10% cap followed by mutual fund schemes.

24. What is the minimum investment required by accredited investors for SIFs?

The minimum investment required for SIFs is ₹10 lakhs, but this does not apply to accredited investors. 

For accredited investors, the minimum amount is ₹1 lakh, subject to the below mentioned criteria.

Individuals, HUFs and Family: Annual Income >= ₹2 crores OR Annual income > ₹1 crore + Net Worth > (Financial Assets >= ₹2.5 crores) OR Net Worth >= ₹7.5 crores (Financial Assets >= ₹3.75 crores)

Trusts other than Family Trusts: Net Worth >= ₹50 crores

Body Corporates: Net Worth >= ₹50 crores 

25. Is the minimum investment amount across AMCs or per scheme?

This ₹10 lakh minimum is not per scheme, but at PAN-level across all SIFs from the same AMC. If your investment dips below ₹10 lakh (due to market movement), you must exit completely - partial redemptions below this level are not allowed.

 If you're an accredited investor, you're exempt from this ₹10 lakh rule. 

26. What happens if my investment value goes below the minimum investment threshold?

AMCs are not allowed to accept investments below ₹10 lakh. However, if the investment value falls below this threshold due to a market decline, it will be considered a passive breach and not treated as a violation. In such a case, the investor will only be permitted to redeem the entire remaining investment from the SIF.

27. Why do Specialized Investment Funds (SIFs) operate under a brand name different from that of the Asset Management Company (AMC)?

As per SEBI regulations governing SIFs, AMCs must ensure that the SIF has a unique brand name and maintains a separate website, distinct from its regular mutual fund business. Additionally, the SIF must have a separate identity to clearly differentiate its offerings from those of a mutual fund. 

28. Are SIFs required to benchmark their schemes?

Yes, similar to mutual funds, SIF investment strategies will follow a single-tier benchmark, with an optional second-tier benchmark at the AMC’s discretion. AMCs must select a broad market index based on the investment objective and portfolio composition. 

29. What is the limit of derivatives exposure under SIFs?

SIF investment strategies can allocate up to 25% of net assets to exchange-traded derivatives, beyond hedging and rebalancing purposes.

30. Do SIFs provide liquidity?

Liquidity in open ended strategies is similar to mutual fund schemes. In hybrid and fixed income strategies, redemption is at pre-defined intervals and additionally liquidity is available through exchange listing.

31. Does SIF offer the same facilities as SIP, SWP and STP – as in a mutual fund?

Yes. SIP facility is available under the SIF. The clauses on SWP and STP will be subject to compliance with provisions mentioned under “Minimum investment threshold” as stated under Clause “Minimum threshold requirement and consequences of non- maintenance” of the ISID. 

32. Are mutual fund distributors entitled to distribute Specialized Investment Funds?

Yes, mutual fund distributors can distribute Specialized Investment Funds (SIFs) in India, but they must first pass the NISM Series-XIII: Common Derivatives Certification Examination and register with AMFI for SIF distribution. This requirement ensures distributors have the necessary knowledge to handle these more complex investment products, which are designed for experienced investors.

33. Why is the Certification Necessary?

SIFs are designed to provide access to more specialized investment strategies, often involving derivatives and alternative assets like private equity or real estate. The NISM Series-XIII certification is a mandatory measure to equip distributors with the specialized knowledge required to guide investors through these products.

34. How do I determine my eligibility to invest in a SIF?

To determine your eligibility for a Specialized Investment Fund (SIF), you must meet the SEBI-mandated minimum investment threshold of ₹10 lakh in the aggregate across all SIF investment strategies under a single Permanent Account Number (PAN) level, unless you are an accredited investor.

Additionally, your risk profile should align with the high-risk nature of SIFs, which employ advanced strategies and include exposure to derivatives.

Investors are advised to consult with their independent financial and tax advisors to understand the potential risks, returns, and tax implications of SIF investment in light of their individual circumstances. 

35. How SIF differs from Mutual Funds?

• Investment Flexibility: SIFs have more freedom in their investment strategies, including the use of derivatives and unhedged short positions, unlike the more restrictive mutual funds.
• Liquidity: While mutual funds often offer daily subscription and redemption, SIFs may have weekly or longer redemption cycles, depending on the strategy.
• Risk Profile: SIFs often fall into medium to high-risk categories due to their use of derivatives and complex strategies.

36. Are SIFs safe and regulated?

Yes. SIFs are governed by SEBI under the mutual fund rulebook, ensuring transparency, investor protection, and operational oversight.

37. How is a SIF different from Mutual Funds, PMS and AIF?

Key Features of SIF:

SIFs have several distinct characteristics: 

• A minimum investment of ₹10 lakh is generally required, though accredited investors are exempt.
• They are intended for sophisticated investors, HNIs, and professionals comfortable with moderate to high risk, rather than retail investors.
• SIFs offer greater flexibility in strategies and can invest in a wide range of assets, including derivatives.
• They are regulated by SEBI and adhere to transparency requirements.
• SIFs can take unhedged short positions using derivatives up to 25% of net assets.
• They can be structured as open-ended, close-ended, or interval funds.
• Liquidity is generally lower than mutual funds.
• SIFs are considered medium to high risk and use a 5-level risk banding system.
• They follow pass-through taxation.
• SIFs require distinct branding and enhanced disclosures. 

Minimum threshold requirement and consequences of non- maintenance:

The AMC shall ensure that an aggregate investment by an investor across all investment strategies offered by the SIF, at the Permanent Account Number (‘PAN’) level, is not less than INR 10 lakh. Provided that the requirement of minimum investment amount shall not apply to an accredited investor. Provided that, the above provisions shall not be applicable for mandatory investments made by AMC for designated employees under paragraph 6.10 of the Master Circular for Mutual Funds dated June 27, 2024. The AMC shall monitor compliance with the Minimum Investment Threshold on a daily basis and ensure that there are no active breaches. The AMC shall ensure that the investor's total investment value does not fall below the Minimum Investment Threshold due to redemption transactions initiated by the investor.

Passive breaches (occurrence of instances not arising out of omission and commission by AMC), such as those caused by a decline in Net Asset Value (NAV), shall not be treated as a violation of the Minimum Investment Threshold. However, if the total investment value falls below the threshold due to a passive breach, the investor shall only be permitted to redeem the entire remaining investment amount from the SIF.

 Active Breaches shall mean fall in the aggregate value of an investor’s total investment across all investment strategies of SIF, below the Minimum Investment Threshold of INR 10 lakh, on account of any transactions (i.e. redemption, transfer, sale etc.) initiated by the investor. 

In case of any active breach of the Minimum Investment Threshold by an investor including through transactions on stock exchanges or off-market transfers: 

(a) All units of such investor held across investment strategies of the concerned SIF shall be frozen for debit, and 

(b) A notice of 30 calendar days shall be given to such investor to rebalance the investments in order to comply with the Minimum Investment Threshold. 

Pursuant to the said notice issued to the investor: 

1. In case investor rebalances his/her investments in SIF within the notice period of 30 calendar days, the units of SIF of such investor shall be un freezed, and no further action shall be taken with regard to compliance with Minimum Investment Threshold.
2.  In case the investor fails to rebalance the investments within the aforesaid 30   calendar day period, the frozen units shall be automatically redeemed by the AMC, at the applicable Net Asset Value of the next immediate business day after the 30th calendar day of the notice period.

Fund houses offering Specialized Investment Funds (SIFs) must freeze units if an investor’s holding falls below the minimum investment threshold of Rs. 10 lakh.

 However, this requirement applies only in cases of active breach, such as redemptions or switch transfers. 

Passive breaches—where the investment value drops below the threshold due to market movements—will not trigger this rule.