SEBI Sets Compliance Rules for SIF Investment Threshold

Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/107; Dated: 29.07.2025

SEBI Introduces Compliance Monitoring for SIFs

The Securities and Exchange Board of India (SEBI) has introduced a robust compliance mechanism to ensure adherence to the minimum investment threshold under Specialised Investment Funds (SIFs). This regulatory step aims to safeguard the integrity of the investment framework and ensure that only eligible investors participate in such funds.

Minimum Investment Threshold Set at ₹10 Lakh

Under the new guidelines, investors in SIFs must maintain a minimum investment of ₹10 lakh. This threshold applies to all forms of transactions—whether executed through stock exchanges or via off-market transfers. SEBI has mandated that any active breach of this threshold by an investor will trigger immediate regulatory action.

Freezing of Units for Non-Compliance

If an investor’s holding falls below the required ₹10 lakh, SEBI will freeze all units held by the investor across all investment strategies of the concerned SIF. This freeze will apply to debit transactions, effectively restricting the investor from redeeming or transferring units until compliance is restored. This measure ensures that the investment threshold is continuously met and prevents circumvention of the regulations.

30-Day Notice Period for Rebalancing

To provide a fair opportunity for compliance, SEBI has made it mandatory for fund managers or SIFs to issue a 30-calendar-day notice to the investor. During this period, the investor must rebalance their portfolio to meet the required threshold. Failure to do so within the stipulated time will lead to the enforcement of the freeze on units, thereby reinforcing the seriousness of the compliance mandate.

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