Description

BSE introduces Specialized Investment Funds (SIF) functionality for 360 ONE Mutual Fund with specific requirements for Accredited and Non-Accredited investors, including minimum investment thresholds and distributor registration requirements.

Summary

BSE has activated Specialized Investment Fund (SIF) functionality for 360 ONE Mutual Fund on the BSE StAR MF platform. The circular outlines key operational requirements including separate AMC creation for SIF schemes, minimum investment criteria for Accredited and Non-Accredited investors, mandatory NISM XIII examination and AMFI registration for distributors, and system validations for investor classifications and mode of holding scenarios.

Key Points

  • Separate AMC has been created and activated for 360 ONE Mutual Fund’s SIF schemes on BSE StAR MF platform
  • 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)
  • 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 to distribute SIF schemes
  • BSE provides manual and bulk upload facilities for updating Accredited Investor details through member logins
  • Accredited Investor details are frozen at order entry level for fresh/lumpsum subscriptions creating new folios
  • Accredited Investors must renew registration certificates before expiry with certificate issuing authorities
  • For joint holdings, AI exemptions apply only if first holder is Accredited Investor

Regulatory Changes

Investor Classification Requirements

Accredited Investor: Minimum investment as per AMC-specified amounts in SID

Non-Accredited Investor: Mandatory ₹10 lakh minimum investment threshold

AUM Maintenance: All SIF clients must maintain minimum ₹10 lakh AUM; cannot fall below this threshold due to redemptions

Distributor Registration

  • New and existing members must complete NISM XIII examination
  • Mandatory AMFI registration required for SIF distribution
  • Only registered distributors will be auto-mapped/empanelled with AMC
  • Exchange does not validate distributor registration; unregistered member transactions may be rejected by AMC/RTA

Mode of Holding Rules for Accredited Investor Status

  1. Single Holder: If first holder is AI, AI exemptions apply across all transaction types
  2. Joint Holders (FH=AI, JH=Non-AI): AI exemptions apply for all transactions
  3. Joint Holders (FH=AI, JH=AI): AI exemptions apply for all transactions
  4. Joint Holders (FH=Non-AI, JH=AI): AI exemptions do NOT apply; processed under normal SIF regulations with limitations

Compliance Requirements

For Members/Distributors

  1. Complete NISM XIII examination and obtain AMFI registration for SIF distribution
  2. Update Accredited Investor details accurately through:
    • Manual entry: Admin » Client Details » Client Master Upload
    • Bulk upload: Pipe-separated text file format (Member Code | Client Code | PAN Number | Accredited No. | Validity)
  3. Verify Accredited Investor details using Accredited Client Report (Admin » Admin Reports » Accredited Client Report)
  4. Exercise utmost care in updating correct AI details to avoid rejections and client refunds from AMC/RTA
  5. Ensure AI details are current and valid before order entry as details are frozen at order entry level

For Investors

  1. Non-Accredited Investors: Invest minimum ₹10 lakh for first-time investment
  2. Accredited Investors:
    • Meet minimum investment amounts per AMC’s SID
    • Maintain valid Accredited Investor registration certificate
    • Renew registration certificate prior to expiry
  3. All SIF Investors: Maintain minimum ₹10 lakh AUM at all times

For AMCs/RTAs

  1. Create separate AMC structure for SIF schemes
  2. Monitor client AUM to ensure ₹10 lakh minimum threshold compliance
  3. Validate Accredited Investor status and certificate validity
  4. Process transactions according to mode of holding and AI status rules

Important Dates

  • Effective Date: February 5, 2026 (circular issuance date)
  • Ongoing: Accredited Investor certificates must be renewed prior to expiry
  • Ongoing: AUM monitoring to maintain ₹10 lakh minimum threshold

Impact Assessment

Market Impact

High impact on mutual fund distribution ecosystem: Introduction of SIF category creates new product segment with stricter eligibility criteria, potentially limiting retail participation while opening opportunities for high-net-worth and institutional investors.

Operational Impact

Distributors: Must invest in NISM XIII certification and AMFI registration, creating entry barriers and compliance costs. Risk of transaction rejection if registration requirements not met.

Investors: Non-accredited investors face high entry barrier (₹10 lakh minimum), restricting access to specialized investment strategies. Accredited investors gain access to potentially differentiated investment products.

AMCs/RTAs: Operational complexity increases with separate AMC structure, dual investor classification tracking, AUM threshold monitoring, and AI certificate validation processes.

Technology Impact

Platform Enhancements: BSE StAR MF platform upgraded with manual and bulk upload capabilities for AI details, new validation rules for mode of holding scenarios, and reporting functionality for AI client tracking.

Data Management: Members responsible for accurate AI data entry with details frozen at order entry; data quality critical to avoid rejections and operational issues.

Impact Justification

Introduces new SIF product category with significant regulatory requirements affecting distributors, investors, and AMCs. Requires NISM XIII certification for distributors and establishes minimum investment thresholds of ₹10 lakh for non-accredited investors.