Description

BSE announces the availability of ICICI Mutual Fund's newly launched Specialized Investment Funds (SIF) on its StAR MF platform, following SEBI's regulatory framework effective April 1, 2025.

Summary

BSE announces the introduction of ICICI Mutual Fund’s Specialized Investment Funds (SIF) on its StAR MF platform. This follows SEBI’s circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/26 dated February 27, 2025, which established the regulatory framework for SIFs as a new investment product category. SIFs are designed to bridge the gap between traditional Mutual Funds and Portfolio Management Services (PMS) in terms of portfolio flexibility and investment sophistication.

Key Points

  • SEBI introduced Specialized Investment Funds (SIF) through amendments to SEBI (Mutual Funds) Regulations, 1996
  • SIFs fill the gap between Mutual Funds and PMS, offering intermediate portfolio flexibility
  • ICICI Mutual Fund’s SIF schemes are now available on BSE StAR MF platform
  • Regulatory framework effective from April 1, 2025
  • Two eligibility routes for mutual funds to establish SIFs: Route 1 (Sound track record) and Route 2 (alternative criteria)
  • Route 1 requires: 3 years operation, average AUM of INR 10,000 crores, and no regulatory action against sponsor/AMC

Regulatory Changes

SEBI has amended the SEBI (Mutual Funds) Regulations, 1996 to introduce Chapter VI-C covering the regulatory framework for Specialized Investment Funds. This creates a new category of investment products with a risk-based regulatory approach that is more flexible than traditional mutual funds but more structured than PMS. The framework adopts progressively flexible norms from MFs to PMS to AIFs, aligned with investor sophistication and minimum investment sizes.

Compliance Requirements

  • Stock Exchanges, Clearing Corporations and Depositories must implement necessary systems for SIF trading and operations
  • AMFI required to issue necessary guidelines and standards by March 31, 2025
  • Market participants must make necessary amendments to bye-laws, rules and regulations
  • Registered mutual funds wishing to establish SIFs must meet specified eligibility criteria under Route 1 or Route 2
  • Mutual funds must ensure no regulatory action has been initiated against sponsor/AMC to qualify

Important Dates

  • February 27, 2025: SEBI circular issued establishing SIF regulatory framework
  • March 31, 2025: Deadline for AMFI to issue necessary guidelines/standards
  • April 1, 2025: Effective date for SIF regulatory framework
  • January 13, 2026: BSE circular announcing ICICI Mutual Fund SIF availability on StAR MF platform

Impact Assessment

The introduction of SIFs represents a significant evolution in India’s investment management landscape, creating a new product category that addresses the gap between mutual funds and PMS. For investors, this provides access to more flexible portfolio strategies than traditional mutual funds while maintaining regulatory oversight. For asset management companies like ICICI Mutual Fund, this opens new business opportunities to serve high net-worth investors seeking sophisticated investment strategies. The availability on BSE StAR MF platform enhances accessibility and distribution capabilities. Market impact is primarily structural rather than immediate, as it expands the investment product ecosystem without directly affecting listed company operations or trading activities.

Impact Justification

Introduction of new investment product category bridging gap between mutual funds and PMS, relevant for investors and market participants but not requiring immediate action from listed companies