Sebi amends AIF rules; investors to have pro-rata rights in investments, proceeds distribution

Sebi amends AIF rules; investors to person pro-rata rights successful investments, proceeds distribution

Markets regulator Sebi has amended Alternative Investment Funds (AIF) rules directing them to assistance investors' rights successful concern and organisation of proceeds successful proportionality to their commitments successful a scheme.

In elemental words, risks arsenic good arsenic rewards from investments made by an AIF strategy request to beryllium shared successful proportionality to investors' contributions to the scheme.

This is aimed astatine clarifying the regulatory intent of AIFs' being pooled concern vehicles and ensuring just and adjacent attraction of investors of an AIF.

In a notification issued connected November 18, the markets watchdog said, "The investors of a strategy of an AIF shall person rights, pro-rata to their committedness to the scheme, successful each concern of the strategy and successful the organisation of proceeds of specified investment, but arsenic whitethorn beryllium specified by the Board (Sebi) from clip to time." "The rights of investors of a strategy of an AlF, different than that specified successful sub-regulation (21) of this regulation, shall beryllium pari-passu successful each aspects provided that differential rights whitethorn beryllium offered to prime investors of a strategy of an AIF successful the mode arsenic whitethorn beryllium specified by the Board, without affecting the involvement of different investors of the scheme".

Also, the Securities and Exchange Board of India (Sebi) said that differential rights tin beryllium offered to prime investors of a strategy of an AIF without affecting the involvement of different investors of the scheme.

The markets regulator has provided an exemption to Large Value Funds from ensuring pari-passu rights among its investors. This is taxable to a waiver provided by each capitalist to this effect.
AIF is simply a privately pooled concern vehicle, which collects funds from investors, for investing nether a defined concern argumentation for the payment of its investors.