The ₹10 Lakh Threshold — How It Is Counted and Who Is Exempt
The one entry condition specific to a SIF is a minimum investment of ₹10 lakh per investor. This lesson explains how the amount is counted, what does not count, who is exempt, and what the threshold does not tell an investor.
The rule
SEBI's SIF framework sets a minimum investment of ₹10 lakh per investor. It is the one SIF-specific entry condition; ordinary mutual fund requirements such as valid KYC apply as they do to any scheme.
Accredited investors are exempt. An accredited investor is one who holds accreditation under SEBI's rules, which look at income or net worth.
How the ₹10 lakh is counted
The amount is counted across all investment strategies of that SIF, at the level of the investor's Permanent Account Number (PAN). An investor does not need ₹10 lakh in each strategy: holdings under the same PAN in the different strategies of one SIF are added together.
Two things are left out. Holdings in the same AMC's regular mutual fund schemes do not count. And each AMC's SIF has its own threshold, so money in one AMC's SIF does not help to meet the minimum in another's.
The minimum applies however a person invests. An AMC may offer SIP, SWP and STP in a SIF, but only provided the ₹10 lakh threshold is met.
What the framework leaves open
Beyond the minimum, the framework is silent on amount. It sets no maximum, no recommended share of a person's wealth and no suitability test, so no rule says how much anyone may or ought to invest. A cap or 'recommended allocation' quoted elsewhere is somebody's opinion, not part of SEBI's framework.
What the threshold does not tell you
Meeting the threshold says nothing about risk. Each strategy shows its risk on a five-level risk-band, and every SIF carries a mandatory warning that investments in a SIF involve relatively higher risk including potential loss of capital, liquidity risk and market volatility.
Rules at a glance
Counting the threshold
- Assumptions for this example: Sunita, 44, is not an accredited investor. She holds ₹18 lakh in regular schemes of AMC A and wants to invest, at the same time, ₹6 lakh in one strategy and ₹4 lakh in another strategy of AMC A's SIF, so that the total under her PAN is ₹10 lakh from the start.
- Count only the SIF strategies of AMC A under her PAN: ₹6 lakh + ₹4 lakh = ₹10 lakh.
- Compare with the minimum: ₹10 lakh meets the ₹10 lakh threshold. The ₹18 lakh in regular schemes was not counted.
- Now assume she also wants to invest ₹3 lakh in a strategy of AMC B's SIF. Only holdings in AMC B's SIF count there: ₹10 lakh − ₹3 lakh = ₹7 lakh short.
Result. The threshold is met for AMC A's SIF by adding the two strategies (₹6 lakh + ₹4 lakh = ₹10 lakh). It is not met for AMC B's SIF, where ₹3 lakh falls ₹7 lakh short. All amounts are assumptions of the example.
Key points
- The minimum is ₹10 lakh per investor, counted across all strategies of that SIF at PAN level.
- Holdings in the AMC's regular mutual fund schemes do not count, and each AMC's SIF has a separate threshold.
- Accredited investors are exempt from the minimum.
- The framework sets no maximum and no recommended allocation; a five-level risk-band and a standard risk warning apply to every SIF.
Common misunderstandings
- The ₹10 lakh is not required in each strategy: it is counted across all strategies of that SIF at PAN level.
- One ₹10 lakh does not open every SIF: each AMC's SIF has a separate threshold, and regular scheme holdings never count.
- An SIP is not a way round the minimum: SIP, SWP and STP may be offered only provided the threshold is met.
Questions people ask
Is the ₹10 lakh tested only at entry?
No. If the holding falls below ₹10 lakh because the NAV fell (a passive breach), the investor may redeem only the entire holding. If the investor's own transaction causes the shortfall (an active breach), the units are frozen and, after 30 calendar days' notice, redeemed automatically if the shortfall remains.
Does being an accredited investor change the risk?
No. Accreditation removes the ₹10 lakh minimum and nothing else. The same strategies, risk-band and standard warning apply.
Does the framework say how much of one's savings may go into a SIF?
No. It prescribes only a minimum: no maximum, no recommended allocation and no suitability test.
What this lesson relies on
- SEBI Master Circular for Mutual Funds, 20 March 2026, Chapter 21 (Specialized Investment Funds)
- SEBI (Mutual Funds) Regulations, 2026 (exemption for accredited investors)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.