RBI permits Indian Alternative Investment Funds to invest overseas
Updated: Dec 10, 2014 01:48:47pm
Mumbai, Dec 10 (KNN) To increase investment opportunities for Indian Alternative Investment Funds (IAF) registered with the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) has permitted them to invest overseas.
“On a review, it has been decided to permit an Indian Alternative Investment Fund (AIF), registered with Securities and Exchange Board of India (SEBI), to invest overseas in terms of the provisions issued under the A.P. (DIR Series) Circulars No. 49 and 50 dated April 30, 2007 and May 04, 2007 respectively,” the central bank said in a notification yesterday.
Alternative Investment Funds (AIFs) are funds established in India, for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy.
Earlier, AIFs wanting to invest abroad needed to set up a special purpose vehicle. Not having to do so will help them diversify their portfolio, media reports said.
Under SEBI guidelines, AIFs can operate broadly in three categories. The SEBI rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others, the reports said.
The Category-I AIFs are those funds that get incentives from the government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.
The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of two other categories.
The Category-III AIFs are those trading with a view to making short-term returns and it includes hedge funds, among others. (KNN Bureau)
“On a review, it has been decided to permit an Indian Alternative Investment Fund (AIF), registered with Securities and Exchange Board of India (SEBI), to invest overseas in terms of the provisions issued under the A.P. (DIR Series) Circulars No. 49 and 50 dated April 30, 2007 and May 04, 2007 respectively,” the central bank said in a notification yesterday.
Alternative Investment Funds (AIFs) are funds established in India, for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy.
Earlier, AIFs wanting to invest abroad needed to set up a special purpose vehicle. Not having to do so will help them diversify their portfolio, media reports said.
Under SEBI guidelines, AIFs can operate broadly in three categories. The SEBI rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others, the reports said.
The Category-I AIFs are those funds that get incentives from the government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.
The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of two other categories.
The Category-III AIFs are those trading with a view to making short-term returns and it includes hedge funds, among others. (KNN Bureau)
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