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Sebi amends regulations for AIFs, stock exchanges, other MIIs

PTI  

Capital markets regulator Sebi has amended regulations for alternative investment funds (AIFs) and market infrastructure institutions (MIIs), including stock exchanges, to facilitate the ease of doing business and simplify compliance requirements. In MIIs, Sebi has done away with the need for Sebi's post-facto approval for acquisitions between 2-5 % shareholding for all eligible shareholders. The ''fit and proper'' status of persons acquiring less than 2% of its shareholding will also be made applicable to unlisted stock exchanges and depositories. Sebi has amended the regulations governing alternative investment funds (AIFs) to simplify and rationalise compliance requirements as well as provide investment flexibility and streamline regulatory processes. AIFs under category I and venture capital funds (VCFs) will have to invest at least 75 % of investable funds in unlisted equity shares and equity-linked instruments of venture capital undertakings or in companies listed or proposed to be listed on an SME exchange or the SME segment of an exchange. The existing investment restrictions on the residual portion of investable funds of VCFs have been done away with. Further, the minimum grant of INR 25 lakh stipulated for category I AIFs - social venture funds - will not apply to grants received from accredited investors. AIFs can also issue partly paid-up units to investors to represent the portion of committed capital invested. Besides, AIFs will have to file a private placement memorandum with Sebi through registered merchant bankers.