The Securities and Exchange Board has notified SEBI (Alternative Investment Funds) (Second Amendment) Regulations 2021 to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. The following amendments have been made:
- Regulation 15 (1)(c), which stipulates the investments done by Category I and II of Alternative Investment Funds, has been substituted, namely:
“Category I and II of Alternative Investment Funds shall invest not more than twenty-five per cent of the investable funds in an Investee Company directly or through investment in the units of other Alternative Investment Funds.”
- Regulation 15 (1)(d), which stipulates the investments done by the Category III of Alternative Investment Funds, has been substituted, namely:
“Category III of Alternative Investment Funds shall invest not more than ten per cent of the investable funds in an Investee Company directly or through investment in units of other Alternative Investment Funds.”
- Regulation 15 (1)(da), which stipulates the investment in other units of Alternative Investment Funds, has been inserted, namely:
“Alternative Investment Funds which are authorised under the fund documents to invest in units of Alternative Investment Funds shall not offer their units for subscription to other Alternative Investment Funds.”
- Regulation 15 (1)(e), which stipulates the approval of authorities for investment, has been substituted, namely:
“Alternative Investment Fund shall not invest except with the approval of seventy five percent of investors by value of their investment in the Alternative Investment Fund in:
- Associates
- units of Alternative Investment Funds managed or sponsored by its Manager, Sponsor or associates of its Manager or Sponsor.”
- Regulation 16 (1)(a), which stipulates the investment scope of the category I, has been substituted, namely:
“Category I Alternative Investment Fund shall invest in investee companies, venture capital undertakings, special purpose vehicles, limited liability partnerships or in units of other Category I Alternative Investment Funds of the same sub-category.”
- Fourth schedule has been inserted, which specifies the code of conduct for Alternative Investment Funds.
*Tanvi Singh, Editorial Assistant has put this story together.