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Vivaik Sharma

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Partner in the Investment Funds Practice at Mumbai office of Cyril Amarchand Mangaldas. Vivaik has over 11 years of experience of advising reputed fund houses on structuring and setting up investment vehicles like including venture capital funds, private equity funds, hedge funds, real estate funds, infrastructure funds, PIPE funds, fund of funds, pre-IPO funds. He has advised fund managers in structuring and formation of bespoke investment structures, obtaining regulatory approvals and with investor disputes. Vivaik has also represented DFIs and sovereign investor for their investments in fund vehicles and set-up curated managed accounts for global investors. He can be reached at vivaik.sharma@cyrilshroff.com.

The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024

The Reserve Bank of India (“RBI”) vide its circular dated May 21, 2024 (“Circular”),[1] has required that issuance of partly paid-up units by Alternative Investment Funds (“AIFs”) to foreign investors prior to March 14, 2024, should be regularised through compounding under Foreign Exchange Management Act, 1999 (“FEMA”). Compounding by RBI is prescribed for the contravention of foreign exchange regulations as per Foreign Exchange (Compounding Proceedings) Rules, 2000, and involve payment of a fees. In many instances, compounding requires payment of a monetary penalty to RBI.Continue Reading The Reserve Bank Of India Mandates Compounding For Issuance Of Partly Paid-Up Units By AIFs Prior To March 14, 2024

FAQs on Regulatory Amendments to AIF Regulations (Ambiguous GAAR Style Obligations Prescribed for Managers and KMPs)

The Securities Exchange Board of India (“SEBI”) has notified amendments to the SEBI Alternative Investment Funds Regulations, 2012 (“SEBI AIF Regulations”) on April 25, 2024, to:Continue Reading FAQs on Regulatory Amendments to AIF Regulations (Ambiguous GAAR Style Obligations Prescribed for Managers and KMPs)

SEBI Adjudicates on Pledging of Securities held by Category I AIFs

Background

In a recent order[1] (“Order”), the Securities and Exchange Board of India (“SEBI”) held that a category I alternative investment fund registered with it (“Fund”); its investment manager (“Manager”); and its trustee (“Trustee”), were in violation of certain SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). Specifically, these violations were with respect to provisions associated with (i) the code of conduct applicable to the Fund, Manager and Trustee; and (ii) provisions related to leverage and borrowings applicable to the Fund.Continue Reading SEBI Adjudicates on Pledging of Securities held by Category I AIFs

FVCI Regulations

Introduction

The Securities and Exchange Board of India (“SEBI”) has released a consultation paper[1] on May 18, 2023 suggesting changes to the regulatory framework for registration and eligibility of Foreign Venture Capital Investors (“FVCIs”). Public comments have been invited on the consultation paper.

SEBI’s proposals are broadly to align the conditions under the SEBI (Foreign Venture Capital Investor) Regulations, 2000 (“FVCI Regulations”) with certain conditions under the SEBI (Foreign Portfolio Investors) Regulations, 2019 (“FPI Regulations”), and with a view to ensure adequate due-diligence and regulate the inflow of foreign capital in India through the FVCI route.Continue Reading FVCI Regulations 2.0: SEBI Proposes to revise FVCI Registration and Eligibility Conditions

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

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

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

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 Updates Framework for Overseas Investments by Alternative Investment Funds and Venture Capital Funds

The Securities and Exchange Board of India (“SEBI”) has updated the regulatory framework applicable to AIFs/ VCFs, seeking to make portfolio investments in offshore companies vide SEBI Circular dated August 17, 2022, titled ‘Guidelines for overseas investment by Alternative Investment Funds (AIFs)/ Venture Capital Funds (VCFs)’ (“SEBI Circular”). AIFs/ VCFs are currently permitted to make portfolio investments in equity and equity linked instruments of offshore venture capital undertakings[1], subject to taking case by case approval of SEBI for each such investment. Such approval is granted by SEBI to AIFs/ VCFs on a ‘first come first serve basis’, within an overall limit of USD 1,500 million.Continue Reading SEBI Updates Framework for Overseas Investments by Alternative Investment Funds and Venture Capital Funds

Fund Management Regulations 2022

I. Introduction

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