SEBI Introduces New Asset Class: Specialized Investment Funds

SEBI has introduced Specialized Investment Funds for high-risk investors and a liberalised Mutual Funds Lite framework for passively managed schemes. These initiatives aim to broaden the investment landscape, offer portfolio flexibility, and address unregistered schemes promising unrealistic returns.

The Securities and Exchange Board of India (SEBI) has rolled out new norms for a novel asset class known as Specialized Investment Funds (SIFs), specifically targeting high-risk profile investors. Concurrently, a liberalised framework for Mutual Funds Lite (MF Lite) focusing on passively managed schemes was also introduced.

Specialized Investment Funds allow for advanced investment strategies across open-ended, closed-ended, and interval structures. These funds can be launched by mutual funds to add diverse investment options, offering minimum investments of Rs 10 lakh per investor. The aim is to provide a middle ground between traditional mutual funds and portfolio management services.

Additionally, SEBI aims to curtail unauthorized investment schemes by enforcing stricter risk controls, ensuring transparency, and distinguishing SIFs from regular mutual funds. The regulatory overhaul includes relaxed criteria for passive mutual fund schemes, fostering an environment that encourages market penetration and diversification.

(With inputs from agencies.)