Norms for Alternative Investment Fund under SEBI (Portfolio Managers) Regulations, 2020 notified by SEBI

1. The Securities and Exchange Board of India (SEBI) has notified the the Securities and Exchange Board of India (Portfolio Managers) (Fourth Amendment) Regulations, 2021 which seeks to amend Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020.

“Alternative Investment Fund” shall have the same meaning as assigned to it in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

2. In sub-regulation (2) of regulation 7, in sub-clause (iii) of clause (d), “Provided further that the Co-investment Portfolio Manager may designate a member of the Key Investment Team of the Manager as the principal officer who fulfils either of the criteria specified in clause (g) of regulation 4 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, and in that case the requirement under clause (d) shall not apply to the principal officer so appointed.”

3. In regulation 22,  in sub-regulation (2), the provisos shall be inserted, namely, After the third proviso, the following proviso shall be inserted, namely, “Provided further that the Co-investment Portfolio Manager may designate a member of the Key Investment Team of the Manager as the principal officer who fulfils either of the criteria specified in clause (g) of regulation 4 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, and in that case the requirement under clause (d) shall not apply to the principal officer so appointed”. “Provided that in case of the Co-investment Portfolio Manager, the terms of co-investment in an investee company by a co-investor, shall not be more favourable than the terms of investment of the Alternative Investment Fund. Provided further that in case of the Co-investment Portfolio Manager, the terms of exit from the Co-investment in an investee company including the timing of exit shall be identical to the terms applicable to that of exit of the Alternative Investment Fund. Provided further that in case of the Co-investment Portfolio Manager, the early withdrawal of funds by the co-investors with respect to Co-investment in investee companies shall be allowed to the extent that the Alternative Investment Fund has also made an exit from respective investment in such investee companies.” The SEBI has substituted FORM A which is an Application for grant of certificate of registration.

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