Direct Tax
Consulting
ESG Advisory
Indirect Tax
Growth Advisory
Internal Audit
BFSI Audit
Industry Audit
Valuation
RBI Services
SEBI Services
IRDA Registration
AML Advisory
IBC Services
NBFC Compliance
IRDA Compliance
Finance & Accounts
Payroll Compliance Services
HR Outsourcing
LPO
Fractional CFO
General Legal
Corporate Law
Debt Recovery
Select Your Location
The Securities Exchange Board of India (SEBI) has permitted Alternative Investment Funds (AIF) to be set up in International Financial Services Centre (IFSC) as Foreign Portfolio Investors (FPIs) to make investments in securities listed on Indian stock exchanges or in specific listed or unlisted corporate debt securities of Indian companies. This was done so because entities set up in IFSCs are considered as ‘non-residents’ for the purpose of Indian Foreign Exchange Regulations and the restrictions placed by SEBI and Reserve Bank of India (RBI) on the participation of Indian residents in FPIs are by default applicable to AIFs in IFSC. Considering the fact that the managers/sponsors are resident Indian entities, they are required to make mandatory sponsor commitment to AIF as prescribed under the SEBI (AIF) Regulations, 2012. So it becomes important to keep a check that the restrictions on residents do not collide with the mandatory sponsor commitment requirement under SEBI (AIF) Regulations, 2012[1] applicable to AIFs in IFSC.
Table of Contents
Proviso 2 to Regulation 4 (c) of the SEBI (FPI) Regulations, 2019 which was inserted by way of amendment to the regulations in 2021 w.e.f. 26.10.2021 provides that resident Indians except an Individual may apply for registration in the following conditions, namely:-
In summation, amendment to the SEBI (FPI) Regulations aligns the SEBI (FPI) Regulations, 2019 with the RBI Circular to permit AIFs in IFSCs subject to mandatory sponsor contribution from the resident manager or sponsor entities for registration as FPIs. Furthermore, the following points must be kept in mind for registration: i) permission for the ‘automatic route’ is available only for the resident Indian entities to the extent of mandatory sponsor commitment ii) mandatory sponsor commitment by an Indian party to AIFs in IFSC under the ‘automatic route’ should be as per the prescribed RBI Circular.
Also Read:SEBI Allowed Participation of AIFs in Credit Default SwapSEBI Issues Guidelines for AIFs for Declaration of First Close of Scheme
A joint venture is a strategic business arrangement in which two or more companies collaborate...
With the rising inflation rates and various other economic factors, wealthy Americans are incre...
Before approaching the new suppliers or any other third parties, you should always go for the v...
With the increasing landscape of Fintech Companies, it is increasingly vital that fintech compl...
This blog gives a detailed description through an audit report for industrial waste by examinin...
Are you human?: 9 + 7 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
How is Portfolio Management Service Different from Alternate Investment Funds? PMS and AIF Before the introduction...
30 May, 2019
Alternative investment funds are a collection of pooled investment funds and conventional methods to diversify port...
15 Jan, 2024
Chat on Whatsapp
Hey I'm Suman. Let's Talk!