Sebi makes investment rules more flexible for FIAs operating in IFSC

New Delhi, August 9 () Sebi said Friday that the investment provisions for the National Alternative Investment Funds (FIA) will also apply to entities operating in the International Financial Services Center (IFSC).

The market regulator circular occurs after consultation with interested parties and decides to harmonize the provisions governing the investments of the FIAs incorporated in IFSC with those applicable to the national FIAs.

Consequently, FIAs incorporated in IFSC may make investments in accordance with the provisions of the Sebi Regulation (Alternative Investment Fund), 2012, and the guidelines and circulars issued there, including the operational guidelines for AIF in IFSC, he said.

The Sebi Regulation (Alternative Investment Fund) refers to the provisions for national FIAs.

All other conditions specified in Sebi circular 2017 for AIF operating in IFSC will remain unchanged, the regulator added.

In 2017, Sebi allowed alternative investment funds operating in IFSC to invest in securities listed in those centers. In addition, it allowed them to invest in securities issued by companies incorporated in IFSC.

The Alternative Investment Fund or FIA refers to any fund established or incorporated in India that is a private investment vehicle that raises funds from sophisticated investors, whether Indian or foreign, to invest according to an investment policy defined for profit of its investors.

Depending on the investment in the fund, they are divided into three categories: Category I AIF, Category II AIF, Category III AIF. Category I funds invest in new companies, small and medium enterprises (SMEs) and venture capital. Category II funds include private equity funds, real estate funds, among others. Category III FIAs include hedge funds. VHP RVK