Concept Paper on Proposed Alternative Investment Funds Regulation for Public Comments
30 Aug 2011
Source: Securities and Exchange Board of India (SEBI)
Deadline: 30 August 2011
The Securities and Exchange Board of India (SEBI) is seeking input on proposed regulation for private pools of capital and alternative investment funds. In short, its premise is that the alternative asset industry needs to be regulated in light of the exponential growth of the private fund industry and its systemic importance. Inter alia, the consultation proposes the following:
i) Registration of Venture Capital Funds is currently mandatory. To ensure unregistered entities cannot exploit opportunities which registered entities enjoy, there is a need to fill in regulatory gaps and introduce uniform norms for the same type of fund or industry;
ii) There is a need to recognise Alternative Investment Funds (AIFs) (such as Venture Capital or Private Equity) as a distinct asset class from promoter holdings, creditors and public investors;
iii) There is a need to establish a framework for the regulator so that it may have an overall picture of the risks posed by AIFs.
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