SEBI through a notification issued on 9 November amended the Alternative Investment Fund Regulations, 2012.
Markets regulator SEBI has come out with a clarification regarding the latest amendment in norms governing Alternative Investment Funds (AIFs).
Via notification issued on 9th NovemberSEBI amended the Alternative Investment Fund Regulations, 2012.
It allowed Category III AIFs, including large-value funds to accredited investors of Category III AIFs, to invest in the listed equities of an investment company to calculate the concentration criteria based on the net asset value (NAV) of the fund. to do.
The amendment also facilitated co-investment through the portfolio management route.
In a circular on Monday, SEBI specified that the investment limit in listed equities should be calculated based on the fund’s NAV on the business day on which Category III AIFs make investments. The NAV of the AIF will be the sum of the value of all securities adjusted for mark to market profit/loss.
This would include cash and cash equivalents but would not include any funds borrowed by the AIF. On passive violation of concentration norms, SEBI said that when the market value of Category III AIF’s investment in listed equity of an invested company exceeds the prescribed investment limit, it shall be rectified within 30 days from the date of contravention. SEBI further said if the sum of the corpus of the AIF and the value of the co-investment managed by the manager of the AIF as co-investment portfolio manager exceeds ₹500 crore, the appointment of a custodian would be required. Co-investment means investment made by a manager or sponsor or investor of Category-I and -II AIFs in companies where such category of AIF invests.
As per the revised norms, co-investment by the investors of AIF will be through a co-investment portfolio manager.
,