Alternative Investment

sebi: Sebi amends rules for Alternative Investment Funds

Capital markets regulator Sebi has amended the rules governing Alternative Investment Funds (AIFs), Registrars to an Issue and Share Transfer Agents. Under the new rules, the Securities and Exchange Board of India (Sebi) said Category I AIFS may engage in hedging, including credit default swaps.

Further, Category II and Category III AIFs may buy or sell credit default instruments.

The sponsor or manager of the Category I and Category I AIF transacting in credit default swaps will have to appoint a custodian registered with the Sebi, according to a notification.

AIFs, in market parlance, refers to a privately-pooled investment vehicle which collects funds from investors whether Indian or foreign for investing these funds in the country. Broadly, AIF rules govern venture capital funds, private equity funds, SME funds, hedge funds among others.

In a separate notification, the regulator said that a Registrar to an Issue and Share Transfer Agent who has been granted registration will have to pay registration fee every three years from the sixth year of the grant of the registration certificate.

A Registrar to an Issue and Share Transfer Agent falling under Category I will have to pay a fee of Rs 2.75 lakh while the one falling under Category II will pay a fee of Rs 90,000.

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