Sebi grants certain exemption to AIFs on investment committee framework

Sebi grants certain exemption to AIFs on investment committee framework

NEW DELHI: Capital markets regulator Sebi on Friday provided certain exemptions to alternative investment funds (AIFs) with regard to an investment committee framework.

The exemption in AIF rule is conditional upon a capital commitment of at least Rs 70 crore from each investor accompanied by a suitable waiver, Sebi said in a notification.

So far, manager was responsible for investment decisions of the alternative investment fund and the manager was required to constitute an investment committee to approve investment decisions of the AIF.

The members of investment committee were equally responsible as the manager for investment decisions.

Besides, the manager and members of the committee were required to ensure that the investments were in compliance with the regulatory provisions, the terms of the placement memorandum, agreement made with the investor and any other fund documents.

Now, these two rules will “not apply to an AIF in which each investor, other than the manager, sponsor, employees or directors of the AIF or employees or directors of the manager, has committed to invest not less than Rs 70 crore (or an equivalent amount in currency other than Indian rupee) and has furnished a waiver to the AIF in respect of compliance with the said clauses, in the manner specified by the board”, Sebi said.

Separately, the regulator has come out with the format for waiver to be furnished by the investors in this regard.

In another notification, Sebi has come out with a disclosure framework for companies that undergo corporate insolvency resolution and seek relisting following the process.

Such companies will be required to make additional disclosures, Sebi said. These will include specific details of resolution plan, including details of assets post-corporate insolvency resolution process and details of securities continuing to be imposed on the companies’ assets and other material liabilities imposed on the firm, it added.

Besides, they need to make disclosure about proposed steps to be taken by the incoming investor or acquirer for achieving the minimum public shareholding and quarterly disclose the status of achieving the minimum public shareholding norms.

In December, the Sebi board decided to tweak norms pertaining to 25 per cent minimum public shareholding for companies which undergo corporate insolvency resolution.

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