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SIF – rule sets

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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.
Figure: An investor deposits capital in a SIF that requires a KYC check
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