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Sapna Raskar

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Associate in the Investment Funds (General Corporate) Practice at the Mumbai office of Cyril Amarchand Mangaldas. She has assisted with the set-up, documentation and registration of AIFs. She can be reached at sapna.raskar@cyrilshroff.com

AIF

Introduction

To enhance the standardisation of the application process, SEBI, on November 3, 2022, published ‘FAQs for grant of registration as alternative investment fund’[1] (“FAQs”). The FAQs are guidelines for submission of the application for seeking registration as an Alternative Investment Fund (“AIF”). In addition to the information, documents and undertakings mandated under the First Schedule of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), an applicant will now be required to submit information, documents and undertakings, as reproduced in this article. Thus, the application form will now constitute the following, (a) information as specified under the First Schedule of the AIF Regulations; and (b) other information as specified in the FAQs.Continue Reading SEBI prescribes additional requirements for registering AIFs

SEBI Clarifies Applicability of Portfolio Managers Regulations to an Indian Manager of an Offshore Fund

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

SEBI amends FPI Regulations to permit registration of AIFs in IFSC with resident sponsors managers as FPIs

Previously, RBI had permitted Indian entities to make mandatory sponsor commitment to AIFs in IFSC under the ‘automatic route’

Introduction

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

SEBI Prescribes New Registration Requirement

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