What is the story about?
The Securities and Exchange Board of India (SEBI) has issued new compliance reporting requirements for Specialised Investment Funds (SIFs), aiming to standardise disclosures and enhance investor protection. The move comes as SIFs bridge the gap between mutual funds and portfolio management services (PMS), offering more flexible investment strategies to retail investors.
Under the revised framework, asset management companies (AMCs) managing SIFs must follow all reporting obligations applicable to mutual funds under SEBI (Mutual Funds) Regulations, 1996, and the Mutual Fund Master Circular.
Key changes in reporting:
Compliance Test Report (CTR): The CTR format has been updated to include a new part specifically for SIFs. AMCs will now report additional compliance details, including:
Half-Yearly Trustee Report (HYTR): Trustees managing SIFs will report on whether AMCs have adequate expertise and systems to manage these funds.
They will also confirm compliance with minimum investment limits, strategy characteristics, fees, investment restrictions, product differentiation, disclosure and branding requirements, and other risk management and investor protection obligations.
Why it matters for investors:
SIFs provide retail investors with access to active and dynamic management strategies, including long-short equity, sector rotation, tactical asset allocation, and diversified portfolios with exposure to equities, fixed income, REITs, InvITs, and derivatives.
The minimum investment in a SIF is ₹10 lakh, making robust compliance and reporting critical for safeguarding investor interests.
The new requirements are effective immediately and are part of SEBI’s ongoing efforts to bring uniformity and transparency to SIF reporting, ensuring investors have a clear understanding of fund operations and risks.
Under the revised framework, asset management companies (AMCs) managing SIFs must follow all reporting obligations applicable to mutual funds under SEBI (Mutual Funds) Regulations, 1996, and the Mutual Fund Master Circular.
Key changes in reporting:
Compliance Test Report (CTR): The CTR format has been updated to include a new part specifically for SIFs. AMCs will now report additional compliance details, including:
- Adherence to minimum investment thresholds
- Certification requirements for SIF fund managers (when applicable)
- Alignment of investment strategies with regulatory characteristics
- Limits on fees and expenses
- Investment restrictions, including single-issuer limits for debt and equity
- Restrictions on derivatives, REITs/InvITs, and ownership of paid-up capital
- Product differentiation, branding, and advertising norms
- Portfolio disclosures, subscription and redemption rules, benchmarking, risk bands, and scenario analysis
Half-Yearly Trustee Report (HYTR): Trustees managing SIFs will report on whether AMCs have adequate expertise and systems to manage these funds.
They will also confirm compliance with minimum investment limits, strategy characteristics, fees, investment restrictions, product differentiation, disclosure and branding requirements, and other risk management and investor protection obligations.
Why it matters for investors:
SIFs provide retail investors with access to active and dynamic management strategies, including long-short equity, sector rotation, tactical asset allocation, and diversified portfolios with exposure to equities, fixed income, REITs, InvITs, and derivatives.
The minimum investment in a SIF is ₹10 lakh, making robust compliance and reporting critical for safeguarding investor interests.
The new requirements are effective immediately and are part of SEBI’s ongoing efforts to bring uniformity and transparency to SIF reporting, ensuring investors have a clear understanding of fund operations and risks.
