Description

BSE introduces Specialized Investment Funds (SIF) functionality for Bandhan Mutual Fund with specific validations for Accredited and Non-Accredited Investors, including minimum investment requirements and distributor registration mandates.

Summary

BSE has activated Specialized Investment Fund (SIF) functionality for Bandhan Mutual Fund on the BSE StAR MF Platform. The circular outlines critical operational procedures, investor classification requirements, and validation mechanisms. Key features include separate AMC creation for SIF, mandatory NISM XIII examination for distributors, minimum investment of ₹10 lakh for Non-Accredited Investors, and specific rules for Accredited Investors. The platform now supports manual and bulk upload of Accredited Investor details with strict validation at order entry level.

Key Points

  • Separate AMC creation required for SIF schemes on BSE StAR MF platform
  • Two investor categories: Accredited Investors and Non-Accredited Investors with different investment requirements
  • Non-Accredited Investors must invest minimum ₹10 lakh for first-time investment in any SIF scheme
  • Accredited Investors follow minimum amounts set by AMC in Scheme Information Documents (SID)
  • SIF client AUM must not fall below ₹10 lakh due to redemption or any other reason
  • Distributors must pass NISM XIII examination and register with AMFI to distribute SIF schemes
  • Only pre-registered distributors from existing list will be auto-mapped/empanelled for SIF
  • Accredited Investor details can be updated manually or through bulk upload in Member Logins
  • Accredited Investor details are frozen at order entry level for new folio creation
  • Accredited Investors must renew registration certificate before expiry
  • Mode of Holding rules apply for AI status determination in joint holdings

Regulatory Changes

Distributor Requirements:

  • New and existing members must pass NISM XIII examination to distribute SIF schemes
  • Mandatory registration with AMFI for SIF distribution
  • Only registered distributors from existing list allowed to distribute SIFs
  • Auto-mapping/empanelment for qualified distributors
  • Transactions from unregistered members liable for rejection by AMC/RTA

Investor Classification Rules:

  • Clear bifurcation between Accredited and Non-Accredited Investors
  • Accredited Investor registration certificate renewal requirement before expiry
  • Separate validation mechanisms for each investor type

Compliance Requirements

For Distributors/Members:

  • Complete NISM XIII examination
  • Register with AMFI for SIF distribution
  • Update Accredited Investor details accurately through Member Login (Admin » Client Details » Client Master Upload)
  • Maintain accurate client records to avoid rejections and refunds
  • Verify AI status before order entry for new folios

For Investors:

  • Non-Accredited Investors: Maintain minimum ₹10 lakh investment across SIF schemes
  • Accredited Investors: Meet AMC-specified minimum investment requirements and maintain valid registration certificate
  • Ensure AUM does not fall below ₹10 lakh threshold

For Joint Holdings:

  • Single Mode: First holder AI status applies exemptions across all transactions
  • Joint Mode (FH=AI, JH=Non-AI): AI exemptions apply
  • Joint Mode (FH=AI, JH=AI): AI exemptions apply
  • Joint Mode (FH=Non-AI, JH=AI): No AI exemptions, normal SIF regulations with limitations apply

Important Dates

  • Effective Date: 2026-01-07 (circular issuance)
  • No specific implementation deadline mentioned
  • Ongoing requirement: Accredited Investors must renew certificates prior to expiry

Impact Assessment

Market Impact:

  • Opens specialized investment category for qualified investors through BSE platform
  • High entry barrier (₹10 lakh minimum) limits participation to high-net-worth individuals
  • Expands product offerings for Bandhan Mutual Fund

Operational Impact:

  • Distributors must obtain additional certification (NISM XIII) creating compliance overhead
  • Enhanced validation mechanisms at order entry level reduce processing errors
  • Separate AMC structure adds administrative complexity
  • Bulk upload facility streamlines Accredited Investor data management

Compliance Impact:

  • Strict investor eligibility criteria require enhanced due diligence
  • Risk of transaction rejection if distributor not properly registered
  • Automated validation at multiple levels (order entry, AMC/RTA processing)
  • Ongoing monitoring required to ensure AUM thresholds maintained

Impact Justification

Introduces new investment product category with strict investor eligibility criteria, mandatory distributor certification requirements (NISM XIII), and significant minimum investment thresholds of ₹10 lakh for non-accredited investors.