MUMBAI (Reuters) – India’s market regulator said it will allow asset managers with more than a three-year track record to offer a range of investment strategies under its newly created ‘specialised investment fund’ (SIF) category, aimed at wealthier investors.
The new category of investment funds, first announced last year as a way to offer sophisticated investors a wider range of options, can begin operations starting April 1, when the new rules kick in.
The minimum investment size of these funds is 1 million Indian rupees ($11,478.55).
“The current range of investment products with varying risk-reward profiles are intended to meet the investment needs of retail, high net-worth and institutional investors,” the Securities and Exchange Board of India (SEBI) said on Thursday, releasing detailed regulations.
SIFs can offer equity long-short, debt long-short and sectoral long-short funds, along with other investment strategies.
The funds can be launched as open-ended or close-ended, and can take exposure to derivative instruments up to 25% of the fund’s net assets.
However, if a fund is close-ended, the units of the fund must be listed on exchanges to provide investors an option to exit.
Asset management companies (AMCs) with a track record of three years and experience in managing at least 100 billion rupees in assets can offer such funds.
Alternately, a fund house which has a chief investment officer with 10 years of experience and has managed at least 50 billion rupees in assets can offer such products.
SEBI has asked AMCs to distinguish the branding of these higher-risk funds from mutual funds, aimed at retail investors.
($1 = 87.1390 Indian rupees)
(Reporting by Ira Dugal; Editing by Janane Venkatraman)
