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RBI, SEBI mull exemptions for recent AIF investment rules

VCCircle

VCCircle · 1y ago

RBI, SEBI mull exemptions for recent AIF investment rules

India's Reserve Bank and market regulator, SEBI, are reportedly considering exemptions to recently tightened rules on bank investments in alternative investment funds (AIFs) due to unintended consequences. Last month, the RBI ruled that banks and non-bank lenders cannot invest in AIFs with holdings in the banks' current or recent borrowers. However, the industry claims these rules could hinder growth and impact around $8-10bn of investments. The regulators are said to be considering exemptions for funds investing in distressed assets and banks have requested more time or staggered provisions to exit such investments.

Related News

Sebi considers providing flexibility to AIFs to offer co-investment opportunities to investors

YourStory

YourStory · 3m ago

Sebi considers providing flexibility to AIFs to offer co-investment opportunities to investors

The Securities and Exchange Board of India (Sebi) has proposed allowing alternative investment funds (AIFs) to offer co-investment opportunities to investors within the AIF structure by using a co-investment vehicle (CIV). This change aims to provide additional investment chances in unlisted securities of investee companies, targeting qualified investors. Sebi suggests implementing conditions for the CIV model, including exemptions from certain requirements and establishing separate accounts for CIV schemes, to ensure proper use and prevent misuse.

RBI caps investment by a bank in AIF scheme at 10 per cent

Economic Times

Economic Times · 1m ago

RBI caps investment by a bank in AIF scheme at 10 per cent

The Reserve Bank of India (RBI) has imposed a 10% cap on the investment by a single regulated entity (RE), such as banks and non-banking financial companies (NBFCs), in an Alternative Investment Fund (AIF) scheme. Additionally, collective contributions by all REs in an AIF scheme are capped at 20%. These revised guidelines, considering industry feedback and Sebi regulations, aim to strengthen the regulatory framework related to investments in AIF schemes.

Piramal Enterprises to provision for AIF exposure as RBI tightens rules

VCCircle

VCCircle · 1y ago

Piramal Enterprises to provision for AIF exposure as RBI tightens rules

Piramal Enterprises will make provisions for certain exposures to investments in alternate investment fund (AIF) units, in response to new rules set by the Reserve Bank of India (RBI). The RBI has barred regulated entities from investing in AIFs with investments in borrowers in the past 12 months. Piramal's AIF investments amount to INR 38.17bn ($458.78m), and the company intends to adjust these funds through capital or provisions. Jefferies estimates the provisioning could have a 10% impact on Piramal's net worth.

SEBI lets AIFs borrow to meet drawdown gaps, issues rules for VCF migrating to AIF

VCCircle

VCCircle · 1y ago

SEBI lets AIFs borrow to meet drawdown gaps, issues rules for VCF migrating to AIF

India's Securities and Exchange Board of India (SEBI) has relaxed rules for borrowing by alternative investment funds (AIFs) and for migration of venture capital funds (VCFs) to the AIF structure. AIFs can now borrow to meet temporary shortfalls in drawdown amounts or amounts called from investors, up to a certain limit. VCFs can migrate to the AIF structure until July 2025, and will be registered as a sub-category of Venture Capital Fund under Category I AIFs, with investments and units now guided by AIF regulations.

SEBI Plans Relaxation of Minimum Shareholding Rules

StartupTalky

StartupTalky · 8d ago

SEBI Plans Relaxation of Minimum Shareholding Rules

The Securities and Exchange Board of India (SEBI) plans to relax minimum shareholding rules to encourage market growth. A recent consultation paper suggests increased flexibility in minimum public shareholding (MPS) and public offers (MPO) for companies planning to list. Proposed amendments include extended timelines for meeting shareholding thresholds and changes in market capitalization thresholds. The move aims to simplify fundraising procedures, particularly for large-cap companies, and reduce the need for special SEBI exemptions, fostering more significant listings in India.

RBI eases recently tightened rules for investments by banks, NBFCs in AIFs

VCCircle

VCCircle · 1y ago

RBI eases recently tightened rules for investments by banks, NBFCs in AIFs

India's central bank, the Reserve Bank of India (RBI), has eased its recently tightened rules on investments by banks and non-banking finance companies (NBFCs) in alternative investment funds (AIFs). The rules, which required higher provisions to be set aside, were originally put in place to address concerns about the use of AIFs to mask bad loans. However, the RBI has now clarified that banks only need to cover the portion of their investment in an AIF that is further invested in the debtor company.

SEBI Tweaks Framework For Valuing Investment Portfolios Of AIFs

Inc42 · 11m ago

SEBI Tweaks Framework For Valuing Investment Portfolios Of AIFs

SEBI has announced new rules stating that securities, excluding unlisted, non-traded, or thinly-traded securities, will be evaluated based on existing mutual fund rules. Additionally, AIF associations have been given the responsibility to establish valuation rules for securities that are not thinly traded or non-traded. Valuers will need to possess appropriate qualifications and be a member of professional organizations like ICAI or CFA Institute, according to SEBI.

RBI proposes easier rules for lenders' investments in AIFs

VCCircle

VCCircle · 3m ago

RBI proposes easier rules for lenders' investments in AIFs

The Reserve Bank of India (RBI) has proposed easing investment rules for lenders in Alternative Investment Funds (AIFs), citing improved financial discipline. The draft guidelines suggest capping a single regulated entity’s investment in an AIF at 10% of its corpus, with a total combined limit of 15% for all lenders. Lenders could invest up to 5% of an AIF’s corpus without restrictions but might need to make provisions if certain conditions are breached.

How Budget 2025 makes GIFT City even more attractive for investors

VCCircle

VCCircle · 6m ago

How Budget 2025 makes GIFT City even more attractive for investors

The 2025 budget introduces enhancements for GIFT City to attract more investors, expanding tax exemptions and benefits for financial institutions in this special zone. Key amendments include broadening tax exemptions from AIF funds to ETFs and extending tax benefits to FPIs and insurance proceeds beyond premium limits. Treasury operations in IFSC will also avoid "deemed dividend" tax, and conditions for offshore funds are relaxed. These measures aim to boost investment and fortify GIFT City's global financial status.

SEBI mandates NISM certification for at least one member in AIF teams

VCCircle

VCCircle · 1y ago

SEBI mandates NISM certification for at least one member in AIF teams

The Securities and Exchange Board of India (SEBI) has announced that at least one member of alternative investment fund (AIF) teams must have a certification from the National Institute of Securities Market (NISM), as part of new regulations. The certification is required to register an AIF and aims to establish a minimum knowledge benchmark for AIF managers. It covers areas such as AIF product features, investment valuation norms, fund governance processes, fund performance measurements, and taxation. The new regulation must be complied with by 9 May 2025.

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