Description

BSE introduces Bandhan Mutual Fund's Specialized Investment Funds (SIF) on StAR MF platform with specific regulations for Accredited and Non-Accredited Investors, including minimum investment requirements and distributor registration norms.

Summary

BSE has introduced Specialized Investment Funds (SIF) of Bandhan Mutual Fund on the BSE StAR MF platform. SIFs require separate AMC creation and have distinct investment rules for Accredited and Non-Accredited Investors. Non-Accredited Investors must invest a minimum of ₹10 lakh for first-time investment, while Accredited Investors follow minimum amounts set by the AMC in Scheme Information Documents. Distributors must pass NISM XIII examination and register with AMFI to distribute SIF schemes. The platform provides facilities for updating Accredited Investor details manually or through bulk upload.

Key Points

  • Bandhan Mutual Fund SIF requires separate AMC activation on BSE StAR MF platform
  • Non-Accredited Investors: Minimum ₹10 lakh investment required for first-time investment in any SIF scheme
  • Accredited Investors: Follow minimum investment amounts set by AMC in SID documents
  • Client AUM must not fall below ₹10 lakh due to redemption or other reasons in AMC/RTA records
  • Distributors must pass NISM XIII examination and register with AMFI for SIF distribution
  • Exchange provides manual and bulk upload facilities for updating Accredited Investor details
  • Accredited Investor details are frozen at order entry level for fresh/lumpsum subscription with new folio creation
  • Accredited Investors must renew registration certificate before expiry
  • For joint holdings, AI exemptions apply if first holder is Accredited Investor, regardless of second holder status
  • For joint holdings where first holder is Non-AI and second holder is AI, normal SIF regulations apply with limitations

Regulatory Changes

Investment Framework

  • New investor classification system: Accredited Investor vs Non-Accredited Investor
  • Minimum investment threshold of ₹10 lakh for Non-Accredited Investors
  • AUM maintenance requirement: Client holdings must not fall below ₹10 lakh

Distributor Requirements

  • Mandatory NISM XIII examination qualification
  • Mandatory AMFI registration for SIF distribution
  • Auto-mapping/empanelment for registered distributors in AMC systems
  • No exchange-level validation; AMC/RTA may reject transactions from unregistered distributors

Mode of Holding Rules

  1. Single Mode of Holding: AI exemptions apply if first holder is AI
  2. Joint Mode (FH=AI, JH=Non-AI): AI exemptions apply across all transaction types
  3. Joint Mode (FH=AI, JH=AI): AI exemptions apply across all transaction types
  4. Joint Mode (FH=Non-AI, JH=AI): No AI exemptions; normal SIF regulations with limitations apply

Compliance Requirements

For Distributors

  1. Complete NISM XIII examination
  2. Register with AMFI for SIF distribution eligibility
  3. Update Accredited Investor details accurately before order entry
  4. Verify client AI status and validity before placing transactions
  5. Monitor AI certificate expiry dates for clients

For Members/Brokers

  1. Update Accredited Investor details through member login:
    • Manual Path: Admin » Client Details » Client Master Upload
    • Bulk Upload Path: Admin » Client Details » Client Master Upload (pipe-separated text file format)
  2. File Structure for bulk upload: Member Code | Client Code | PAN Number | Accredited No. | Validity
  3. Verify Accredited Investor details through: Admin » Admin Reports » Accredited Client Report
  4. Ensure accurate AI details to avoid rejections and refunds from AMC/RTA

For Investors

  1. Non-Accredited Investors: Maintain minimum ₹10 lakh investment across SIF schemes
  2. Accredited Investors: Renew registration certificate before expiry
  3. Maintain AUM above ₹10 lakh threshold

Important Dates

  • Effective Date: January 7, 2026 (circular issuance date)
  • AI Certificate Validity: Must be renewed prior to expiry (investor-specific dates)

Impact Assessment

Market Impact

  • Limited Scope: Affects only specialized investment fund segment, not mainstream mutual funds
  • Target Audience: High-net-worth individuals and institutional investors
  • Bandhan Mutual Fund: Gains access to SIF distribution channel on BSE platform

Operational Impact

  • Distributors: Additional qualification and registration requirements create entry barriers
  • Members/Brokers: New compliance workflows for updating and tracking AI details
  • RTAs/AMCs: Additional validation responsibilities for investor qualifications
  • Investors: Higher minimum investment threshold (₹10 lakh) limits accessibility

Compliance Impact

  • Medium Risk: Incorrect AI details or unregistered distributors may face transaction rejections
  • Administrative Burden: Manual and bulk upload processes require careful data management
  • Ongoing Monitoring: Certificate renewal tracking adds operational overhead

Strategic Considerations

  • Introduction of SIF category aligns with regulatory framework for sophisticated investors
  • Separate AMC structure suggests potential for multiple fund houses to launch SIF products
  • Platform infrastructure ready for broader SIF adoption beyond Bandhan Mutual Fund

Impact Justification

Introduction of new SIF product category with specific investor qualifications and distributor requirements. Affects mutual fund distributors and high-net-worth investors but limited to specialized segment.