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Sebi clarifies “exclusions” in pro-rata distribution mandate for AIFs

Business Standard  

Capital market regulator Securities and Exchange Board of India (Sebi) has clarified ‘exclusions’ from the pro-rata distribution mandate for alternative investment funds (AIFs). The mandate ensures that benefits get distributed in ratio of the commitments made by an investor in the AIF scheme while pari-passu rights are to treat investors equally. The mandate will not be applicable if an investor has been excused or excluded from participating in an investment or if the investor has defaulted in providing the contribution.It has also allowed managers or sponsors of the fund, development financial institutions, or government-owned entities to accept returns lesser or share losses more than their pro-rata rights in the investments.