Rs 10 lakh minimum investment is per PAN, not per SIF scheme: Sebi
New Delhi, Apr 11, 2025
Market regulator says clarification ends confusion for investors allocating funds across different SIF offerings from the same fund house
The market regulator has clarified its minimum investment requirement of Rs 10 lakh applies at the PAN level for all “strategies” under a single asset management company's Specialised Investment Funds (SIF), rather than on a per-scheme basis.
The Securities and Exchange Board of India (Sebi) said the clarification will end confusion among investors when they allocate funds across different SIF offerings from the same fund house. “The new rule specifies that the minimum investment by an investor in all SIF strategies should be at least Rs 10 lakh at the permanent account number (PAN) level,” said Securities and Exchange Board of India (Sebi) in a circular. The rule does not apply to mandatory investments made by asset management companies (AMCs) for designated employees.
Sebi said the rules, which have come into force, regarding the maturity of securities in interval schemes will not apply to interval investment strategies under SIF.
SIFs and their role
A mutual fund (MF) caters to retail investors with simpler needs and a portfolio management service (PMS) offers customised strategies. SIFs bridge the gap between mutual funds and PMS by offering greater portfolio flexibility, making them ideal for high-net-worth individuals and investors seeking sophisticated options.
SIFs allow AMCs to launch tailored strategies such as long-short equity, sectoral rotation, and multi-asset diversification. These strategies provide exposure to niche opportunities that traditional mutual funds may avoid due to their broader mandates.
Rs 10 lakh minimum investment rule: Key Highlights
Sebi's clarification on the Rs 10 lakh minimum investment threshold brings much-needed transparency to the SIF framework. Here are the key aspects of this rule:
PAN-level aggregation: The minimum investment requirement of Rs 10 lakh is calculated across all SIF strategies offered by an AMC at the PAN level. This means investors do not need to meet the threshold separately for each scheme, but must ensure their total investments across all strategies under one AMC meet or exceed Rs 10 lakh.
Systematic investment options: Investors can opt for systematic investment plans (SIPs), systematic withdrawal plans (SWPs), or systematic transfer plans (STPs) under SIFs. However, the total investment value must remain above Rs 10 lakh. In cases where market fluctuations cause a passive breach of this threshold, investors will be required to redeem their entire remaining amount.
Exemptions for accredited investors: Accredited investors are exempt from this minimum investment requirement, allowing them greater flexibility in participating in SIF offerings.
Impact on investors
Sebi’s circular is expected to end confusion among investors who plan to diversify their portfolios across multiple SIF strategies within the same AMC. By applying the Rs 10 lakh threshold at the PAN level, Sebi’s clarification ensures that investors can allocate capital more efficiently without worrying about meeting individual scheme-specific requirements.
Additionally, the introduction of systematic investment options makes SIFs more accessible while maintaining compliance with minimum thresholds. This is particularly beneficial for investors who prefer staggered investments rather than lump-sum contributions.
Implications for asset management companies
For AMCs, Sebi’s framework provides an opportunity to attract high-net-worth individuals and institutional investors through innovative and flexible investment strategies. However, AMCs must ensure strict compliance with these regulations, including maintaining transparency in portfolio disclosures and adhering to risk management protocols.
The PAN-level aggregation rule also simplifies operational processes for AMCs, enabling them to focus on developing diverse strategies under the SIF umbrella without worrying about scheme-specific thresholds.
AMC eligibility to launch SIFs
AMC must have at least three years of operations.
Average AUM of Rs 10,000 crore or more over the last three years.
[The Business Standard]
