On 25-07-2022, the Securities Exchange Board of India(‘SEBI') has issued SEBI (Alternative Investment Funds) (Third Amendment) Regulations, 2022 to amend the SEBI (Alternative Investment Fund) Regulations, 2012
The amendment:
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Insertion of definitions:
1. “Social impact fund” means an Alternative Investment Fund which invests primarily in securities, units or partnership interest of social ventures or securities of social enterprises and which satisfies the social performance norms laid down by the fund.
2. “Social units” means units issued by a social impact fund or schemes of a social impact fund to investors who have agreed to receive only social returns or benefits and no financial returns against their contribution.
3. “Not for profit organization” shall have the same meaning as assigned to it in clause (e) of regulation 292A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
“Not for profit organization” means a Social Enterprise which is any of the following entities:
(i) a charitable trust registered under the Indian Trusts Act, 1882 (2 of 1882);
(ii) a charitable trust registered under the public trust statute of the relevant state;
(iii) a charitable society registered under the Societies Registration Act, 1860 (21 of 1860);
(iv) a company incorporated under section 8 of the Companies Act, 2013 (18 of 2013);
(v) any other entity as may be specified by the Board;
4. “Social enterprise” shall have the same meaning as assigned to it in clause (h) of regulation 292A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
“Social Enterprise” means either a Not for Profit Organization or a For Profit Social Enterprise that meets the eligibility criteria specified in this Chapter.
5. “Social stock exchange” shall have the same meaning as assigned to it in clause (i) of regulation 292A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
“Social Stock Exchange” means a separate segment of a recognized stock exchange having nationwide trading terminals permitted to register Not for Profit Organizations and / or list the securities issued by Not for Profit Organizations in accordance with provisions of these regulations.
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Regulation 16 sub-regulation (4):
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Clause |
SEBI AIF Regulations, 2022 |
SEBI AIF Regulations, 2012 |
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(a) condition to social venture funds Subs. |
75% of the investible fund to be invested in unlisted securities or partnership interest social ventures or in units of social ventures or in securities of social enterprises. Provided that an existing social impact fund may invest the remaining investable funds in securities of not-for-profit organizations registered or listed on a social stock exchange with the prior consent of atleast 75% of the investors by value of their investment. |
75% of the investible fund to be invested in unlisted securities or partnership interest social ventures. |
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(b) proviso Subs. |
The amount of grant that may be accepted by the fund from any person should not be less than Rs.10 lakh |
The amount of grant that may be accepted by the fund from any person should not be less than Rs.25 lakh |
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(ba) Ins. |
Notwithstanding the provisions of clauses (a) and (b), a social impact fund or schemes of a social impact fund launched exclusively for a not-for-profit organization registered or listed on a social stock exchange, shall be permitted to deploy or invest hundred percent of the investable funds in the securities of not-for-profit organizations registered or listed on a social stock exchange. |