SIF – rule sets

A SIF contains a set of rules that govern the behavior of the investors and

the fund manager. SIF rules can restrict secondary market transfers, limit

the list of allowed bank anchors, and specify fund manager fee withdrawals.

SIF rules can also extend to fund managers’ holdings (e.g., target entities

such as private companies, other funds, or asset holders).

As a simple example, the figure below illustrates the flow for an investor

depositing capital in a SIF that requires the investor to pass a KYC check.

The investor issues a transaction to the SIF that includes a selective reveal

of the investor’s KYC information from their financial passport. In order

to process this transaction, the SIF must recognize one of the authorities

who has signed the relevant information in the user’s passport. A custom

list of KYC authorities or root credential authorities could be programmed

directly into the SIF during its setup, or the SIF may reference a dynamic

list maintained by the underlying ledger protocol.