SEBI has released a mandate requiring investors in Special Investment Funds (SIFs) to keep a minimum investment of ₹10 lakh consistently. Mutual funds and Asset Management Companies (AMCs) must now track this threshold daily to ensure adherence and avoid violations resulting from redemptions or other transactions initiated by investors. If the value of the investment decreases to under ₹10 lakh because of withdrawals, transactions on the stock exchange, or off-market transfers the investor’s units in all SIF strategies will become frozen for withdrawal. Investors will have a 30-day period to adjust and return to the minimum investment level. If completed during this timeframe, the hold will be removed without any consequences. If the investment is not restored within 30 calendar days, the frozen units will be automatically redeemed at the applicable Net Asset Value (NAV) on the next business day following the end of the notice period. SEBI clarified that these regulations pertain to any “active breach,” indicating that the decline in investment must result from the investor’s own actions. These compliance regulations take effect immediately and are integral to SEBI’s initiatives to improve transparency, safeguard investor interests, and uphold the integrity of significant investment strategies within the mutual fund sector.
