Description

SEBI prescribes standardized compliance reporting formats for Specialized Investment Funds, introducing modifications to Compliance Test Report and Half-Yearly Trustee Report formats.

Summary

SEBI has issued standardized compliance reporting formats for Specialized Investment Funds (SIFs) to ensure uniformity and clarity. The circular modifies existing Compliance Test Report (CTR) and Half-Yearly Trustee Report (HYTR) formats by adding SIF-specific sections. AMCs managing SIFs must report additional compliance parameters under Part IV of CTR, while Trustees must include Clause 72A in HYTR submissions. These provisions are effective from January 08, 2026.

Key Points

  • All reporting requirements applicable to mutual funds under SEBI (Mutual Funds) Regulations, 1996 also apply to SIFs as per Regulation 49V(2)
  • Compliance Test Report (CTR) format modified to include new Part IV covering SIF-specific compliance parameters
  • Half-Yearly Trustee Report (HYTR) format modified to include new Clause 72A for SIF compliance
  • AMCs managing SIFs must submit Part IV as part of their regular CTR submissions for Mutual Funds
  • Trustees/Trustee Companies managing SIFs must report under Clause 72A in their HYTR submissions
  • Circular references SEBI’s February 27, 2025 circular establishing the SIF regulatory framework

Regulatory Changes

CTR Format Modification (Part IV):

  • Compliance with minimum investment threshold across all investment strategies (Regulation 49X(1))
  • NISM Certification Programme requirements for SIF fund managers (Regulation 49X(2))
  • Investment strategy compliance with stipulated characteristics (Regulation 49Y(1))
  • Limitations on fees and expenses (Regulation 49Y(3))
  • Single issuer limit restrictions for debt instruments (Regulation 49AA(1))
  • Investment restrictions per regulatory guidelines (Regulation 49AA(1))
  • Restrictions on owning paid-up capital of companies (Regulation 49AA(2))
  • Single issuer limit restrictions for equity (Regulation 49AA(3))

HYTR Format Modification:

  • Addition of Clause 72A for SIF-specific trustee oversight and compliance reporting

Compliance Requirements

For Asset Management Companies (AMCs):

  • Submit Part IV of CTR along with regular Mutual Fund CTR submissions
  • Report compliance across all SIF-specific regulatory parameters including investment thresholds, fund manager certifications, strategy compliance, fee limitations, and issuer limits

For Trustees/Trustee Companies:

  • Include Clause 72A in Half-Yearly Trustee Reports submitted for Mutual Funds
  • Provide oversight reporting on SIF-specific compliance matters

Applicable Entities:

  • All Mutual Funds managing SIFs
  • All Asset Management Companies managing SIFs
  • All Registrar and Share Transfer Agents (RTAs)
  • All Trustee Companies/Board of Trustees of Mutual Funds
  • Association of Mutual Funds in India (AMFI)

Important Dates

  • Effective Date: January 08, 2026 (date of circular issuance)
  • Reference Date: February 27, 2025 (original SIF regulatory framework circular)
  • Master Circular Reference: June 27, 2024 (MF Master Circular)

Impact Assessment

Operational Impact:

  • AMCs and Trustees managing SIFs must modify their compliance reporting processes to incorporate new formats
  • Additional reporting burden for entities managing both traditional mutual funds and SIFs
  • Standardization improves regulatory oversight and investor protection in the specialized fund segment

Market Impact:

  • Limited direct market impact as this affects reporting procedures rather than investment strategies
  • Enhances transparency and uniformity in SIF compliance monitoring
  • Strengthens regulatory framework for specialized investment products catering to sophisticated investors

Compliance Impact:

  • Organizations must update internal compliance systems and reporting templates
  • Regular monitoring required for SIF-specific parameters including minimum investment thresholds, fund manager qualifications, investment restrictions, and fee limitations
  • Integration required between SIF compliance tracking and existing mutual fund reporting infrastructure

Impact Justification

Establishes mandatory compliance reporting formats for SIFs affecting AMCs and trustees, but applies to specialized fund category only with limited immediate market-wide impact