Private Placement Memorandum

IFSCA Enables Differential Distributions: Venture Capital Schemes And Restricted Schemes May Issue Senior And Junior Unit Classes

Summary: The IFSCA has introduced a new framework allowing Venture Capital Schemes and Restricted Schemes in GIFT IFSC to issue senior and junior (or subordinate) unit classes with differential distribution rights, facilitating blended finance structures that combine concessional and commercial capital. The framework also prescribes minimum ticket sizes for junior unit holders, enhanced PPM disclosure requirements, and safeguards against evergreening and regulatory circumvention, while easing conditions for ESG Schemes to accept grants. The framework marks a significant shift from the investor-category restrictions applicable under the domestic AIF regime, providing fund managers greater flexibility to structure funds for investors with different risk appetites.

Continue Reading IFSCA Enables Differential Distributions: Venture Capital Schemes And Restricted Schemes May Issue Senior And Junior Unit Classes

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