Market regulator Sebi chalks out investment plans for new asset class

Caps short positions at 25% of corpus for equity schemes

The Securities and Exchange Board of India (Sebi) on Thursday paved the way for the launch of specialised investment funds (SIFs) from April 2025.

 

In a circular, the markets regulator spelled out the products that service providers can launch through specialised investment funds (SIFs).

 

The pure equity products include equity long-short funds, equity ex-top 100 long-short funds, and sector rotation long-short funds.

 

Long-short funds take two types of positions: long (buying stocks or assets with the expectation that their value will rise) and short (selling stocks or assets that the investor expects will decline in value).

 

The short positions in all three fund categories cannot exceed 25 per cent of the corpus.

 

 

On the debt side, fund houses can launch debt long-short funds and sectoral debt long-short funds. There is also a provision to launch hybrid strategies—active asset allocator long-short funds and hybrid long-short funds.

 

Fund houses can launch only one scheme in each of the fund categories.

 

The option to enter the SIF space will be limited to fund houses that meet the eligibility criteria.

 

According to the circular, the fund house should have been in operation for at least three years, and the assets under management (AUM) should have been in excess of ₹10,000 crore in the previous three years.

 

The fund house should not have faced any regulatory action or investigation in the past three years.

 

There is also an alternative route under which the asset management company (AMC) will have to appoint a chief investment officer with over 10 years of experience in managing over ₹5,000 crore, apart from other requirements.

 

SIF, which is designed to bridge the gap between mutual funds (MFs) and portfolio management services (PMS), will have a minimum ticket size of ₹10 lakh.

 

Fund houses can offer systematic investment plans (SIP), systematic withdrawal plans (SWP), and systematic transfer plans (STP) for investment strategies launched under the SIF, while ensuring compliance with the minimum investment threshold.

 

Sebi has directed the Association of Mutual Funds in India (Amfi) to issue guidelines and facilitate implementation by March 31, 2025. 

SIF PRODUCT COMPOSITION

Equity long-short fund 

Equity ex-top 100 long-short fund

  Sector rotation long-short fund

  Debt long-short fund  Sectoral debt long-short fund

  Active asset allocator long-short fund

  Hybrid long-short fund