SEBI issues circular for alternative investment funds

The Securities and Exchange Board of India (SEBI) on 26 November 2018 issued a circular outlining the operating guidelines for alternative investment funds (AIFs) in the international financial services centre (IFSC). SEBI had issued the SEBI (International Financial Services Centre) Guidelines, 2015 (IFSC Guidelines) on 27 March 2015, where it outlined the broad framework for setting up an AIF in the IFSC.

The circular provides for:

Registration of alternative investment funds operating in the IFSC. Any fund incorporated in the IFSC in the form of a trust, company, limited liability partnership (LLP) or body corporate can register itself as an AIF in accordance with the provisions of SEBI (Alternative Investment Funds) Regulations, 2012, under the categories listed. It provides that the application for grant of a certificate should be made in accordance with the registration provisions under the AIF regulations, with a non-refundable application fee of US$1,500 (₹106,142). The circular also provides for the amount of the registration fee, scheme fee and re-registration fee.

Compliance requirements, conditions and restrictions. Any person specified under clause 22(1) of the IFSC Guidelines, which prescribes the conditions on investment, may invest in AIFs operating in the IFSC. Further, such AIF will be permitted to invest in securities: (a) listed in the IFSC; (b) issued by companies incorporated in IFSC; and (c) issued by companies belonging to a foreign jurisdiction.