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
A robust asset management industry along with a well-developed regulatory ecosystem is pivotal to the growth of capital markets, which are in turn critical to a developing economy such as India. The Government of India is taking considerable efforts for ‘onshoring the offshore’ financial services activities to enable India to compete with some of the more established jurisdictions in the world such as Singapore, Mauritius and Hong Kong.Continue Reading IFSCA (Fund Management) Regulations, 2022: Inching closer to make India a Global Hub for Asset Management
In an interpretative letter sought under the SEBI (Informal Guidance) Scheme, 2003 (“Informal Guidance”), the markets regulator has clarified that the investment manager of an alternative investment fund (“AIF”) can provide investment management services to an offshore fund only as a SEBI-licensed portfolio manager under the SEBI (Portfolio Managers) Regulations, 2012 (“PM Regulations”). SEBI also reiterated that the investment managers of AIFs are considered to be regulated by SEBI. In this post, we will explore the queries, SEBI’s responses, and implications for the industry.Continue Reading SEBI Clarifies Applicability of Portfolio Managers Regulations to an Indian Manager of an Offshore Fund
Previously, RBI had permitted Indian entities to make mandatory sponsor commitment to AIFs in IFSC under the ‘automatic route’
Alternative Investment Funds (“AIFs”) set up in an International Financial Services Centre (“IFSC”) are required to register themselves as Foreign Portfolio Investors (“FPIs”), for being able to invest inter alia in securities listed on Indian stock exchanges or in specific listed or unlisted corporate debt securities of Indian companies. Since entities set up in IFSCs are equivalent to ‘non-residents’ for the purposes of Indian foreign exchange regulations, restrictions placed by Securities Exchange Board of India (“SEBI”) and the Reserve Bank of India (“RBI”) on participation of Indian residents in FPIs are, by default, applicable to AIFs in IFSC. Considering that AIFs may be set up by managers/ sponsors who are resident Indian entities and that the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), require managers/ sponsors of AIFs to make mandatory sponsor commitment[1] to the AIF, it is imperative that the restrictions on residents investing in FPIs do not conflict with the mandatory sponsor commitment requirements under AIF Regulations, as applicable to AIFs in IFSC.Continue Reading SEBI amends FPI Regulations to permit registration of AIFs in IFSC with resident sponsors/ managers as FPIs
Marking a significant departure from the erstwhile position, SEBI has mandated that Cat I and II AIF managers should procure Portfolio Management license for facilitating Co-investments
Fund managers desirous of facilitating Co-investments for contributors, sponsors or themselves, in connection with their Category I or Category II AIFs (“Cat I and/or II AIFs”), shall be required to register themselves with SEBI as ‘Co-investment Portfolio Manager’ (as defined below) i.e. a new category of portfolio managers under SEBI (Portfolio Managers) Regulations, 2020 (“SEBI PM Regulations”), effective from December 9, 2021.Continue Reading SEBI Prescribes New Registration Requirement for Cat I & II AIF Managers Facilitating Co-Investments