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SEBI Order casts - Spotlight on Conflicts of Interest of AIFs 

Introduction

The Securities and Exchange Board of India (“SEBI”), vide its settlement order dated May 06, 2025 (“Order”), has accepted a settlement application filed by the investment manager (“Manager”) of a real estate fund (“Fund”), sponsored by a related sponsor entity (“Sponsor”), for breach of various provisions of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”)[1], and the SEBI Master Circular for Alternative Investment Funds, dated May 7, 2024 (“Master Circular”)[2], subject to a payment of INR 36 lakh by the Manager on behalf of itself and the Fund. The Settlement Order emanated from a suo-moto application, seeking settlement of issues pertaining to conflict of interest and non-compliances in operations of the Fund.

Continue Reading SEBI Order casts Spotlight on Conflicts of Interest of AIFs 
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Climate Finance

Climate change is one of the defining challenges of our times. It is a classic example of  a ‘collective action problem’  – one requiring collaborative action between individuals, groups and nations, but where such coordinated action is difficult on account of misaligned incentives. Climate change is likely to result in physical and transition risks that could have implications on stability of the overall financial system as well as the physical safety and financial soundness of banks, financial institutions. Given the potential implications of climate change on monetary policy as well as financial stability, addressing it should be part of the mandate of central banks and financial regulators.

Continue Reading Climate Finance for Regulated Entities – Upcoming Trends
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Introduction

The Securities and Exchange Board of India (“SEBI”) vide its circular dated February 05, 2020, had introduced certain disclosure standards by way of a private placement memorandum (“PPM”) template that all SEBI registered Alternative Investment Funds (“AIFs”) were expected to adhere to. The PPM template inter-alia provided for disclosures under the term “Excuse and Exclusion” and “Direct Plan for investors and constituents of fees that may be charged by the AIFs”.Despite the PPM template, SEBI observed certain disclosure-related inconsistencies and lack of transparency. SEBI by way of circulars dated April 10, 2023, updated the regulatory framework by way of new guidelines to bring in consistency related to disclosures in the PPM.

Continue Reading SEBI Codifies Norms for Excuse and Exclusion and Direct Plan for Investors
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Mergers & Acquisitions

Introduction

While some Indian corporates have been bold acquirers in big-ticket overseas acquisitions, such transactions are rare, often complex, and risky. Indian acquirers have typically used internal accruals or resorted to overseas debt to finance offshore acquisitions due to regulatory restrictions preventing them from using their stock as consideration for the acquisition. Recent liberalisations in the overseas investment framework suggest that this constraint may be going away. While these regulatory changes may provide additional structuring options for cross-border M&A/ restructuring, decisions of certain tribunals on these (relatively recent) amendments may play spoilsport.

Continue Reading Cross-Border Demergers: Navigating muddy waters
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Shareholders Rights

In a corporate democracy, the rule of majority prevails, period! Hence, in most jurisdictions, shareholders’ resolutions may be passed by a simple majority, or, where the decision may be critical to the operations or the future of a company, by a super/ special majority of at least, three-fourths. In this way, the decision of the majority binds all members/ shareholders.

Continue Reading Protection and Redressal of Minority Shareholder Rights
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SEBI Delisting Regime

The Securities and Exchange Board of India (“SEBI”), after much deliberation, replaced the 2009 SEBI Delisting Regulations with the SEBI Delisting Regulations in 2021. The current delisting regime is essentially under two routes, (i) voluntary delisting by the exiting promoters under the SEBI Delisting Regulations, and (ii) delisting by non-promoters/ third party acquirers under Regulation 5A of the SEBI Takeover Regulations.

Continue Reading Need for Amendments to the Delisting Regime in India
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Introduction

The Securities and Exchange Board of India (“SEBI”) released five consultation papers on proposed changes in regulatory norms for alternative investment funds (“AIFs”), inviting comments from the public, on February 03, 2023. These consultation papers indicate the next generation of regulatory reforms that SEBI has planned for AIFs.

Continue Reading SEBI Unveils Next Generation Reforms for AIFs
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The rise of domestic capital in alternative asset space requires the AIF Regulatory Platform be made available to In-house Funds

The Indian growth story has been propelled by alternative asset classes that witnessed an unprecedented inflow of domestic and foreign capital in the last few years. Alternative Investment Funds (“AIFs”) have played an essential role in this and have raised, as on June 30, 2022[1], a whopping INR 6,94,520 crore (Indian Rupees Six lakh ninety-four thousand and five hundred twenty crore), of which actual deployed capital stands at INR 3,11,343 crore (Indian Rupees Three lakh eleven thousand and three hundred forty-three crore). These numbers are up from INR 2,90,339 crore (Indian Rupees Two lakh ninety thousand and three hundred thirty-nine crore) of capital raised and INR 1,19,758 crore (Indian Rupees One lakh nineteen thousand and seven hundred fifty-eight crore) of actual capital deployed, as on June 30, 2019[2]. Securities and Exchange Board of India (“SEBI”), being the capital market regulator in India, has played an active role in streamlining the AIF industry. SEBI’s proactive and investor-friendly approach is often reflected in the discourses with market participants as well as in the guidelines / circulars / regulations issued for the AIF industry.

Continue Reading An Argument for In-house Alternative Investment Funds
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Introduction

The Insurance Regulatory and Development Authority of India (“IRDAI”) has notified the IRDAI (Registration of Indian Insurance Companies) Regulations, 2022 (“2022 Regulations”), on December 8, 2022. The 2022 Regulations consolidate various prescriptions relating to registration of Indian insurance companies and the transfer of shares of such entities. Previously, such prescriptions were dispersed across multiple regulations, circulars, and guidelines such as the IRDAI (Listed Indian Insurance Companies) Guidelines, 2016, and the IRDAI (Investment by PE Funds in Indian Insurance Companies) Guidelines, 2017 (“2017 PE Guidelines”).

Continue Reading IRDAI (Registration Of Indian Insurance Companies) Regulations, 2022 – A Step-Up for Private Equity Participants