Sebi clarifies on applicability of alternative investment funds, portfolio managers rules

The applicant was intending to manage an offshore fund, which will be domiciled in Ireland and the offshore fund would make investments primarily in the permissible listed securities of Indian companies through recognised stock exchanges in India.

Providing an informal guidance in this regard to Ace Lansdowne Investments Services LLP, which manages Sebi-registered AIF -- Ace Lansdowne India Investment Fund-- Sebi indicated that its views might be different for different conditions.
Securities and Exchange Board of India

Investment managers of an AIF (alternative investment fund) can provide investment management services to the offshore fund only by getting registered as portfolio managers, according to markets regulator Sebi.

Providing an informal guidance in this regard to Ace Lansdowne Investments Services LLP, which manages Sebi-registered AIF — Ace Lansdowne India Investment Fund– Sebi indicated that its views might be different for different conditions.

It had sought clarity whether the applicant, which is already acting as the investment manager of an AIF, can provide investment management services to the offshore fund and whether the applicant is required to obtain registration as a portfolio manager.

The applicant was intending to manage an offshore fund, which will be domiciled in Ireland and the offshore fund would make investments primarily in the permissible listed securities of Indian companies through recognised stock exchanges in India.

After looking into submissions, Sebi said, “an investment manager of Sebi-registered AIF can provide investment management services to the offshore fund in Ireland only by obtaining the certificate of registration as a portfolio manager under the PMS Regulations to act as an eligible fund manager”.

It further clarified that the manager of an AIF is not exempted from obtaining registrations under the PMS (portfolio management service) rules to provide investment management services to the offshore fund in Ireland.

“Unlike the Sebi (Investment Advisors) Regulations 2013, the PMS Regulations do not provide for any specific exemptions from registration to any entity and therefore the applicant will have to adhere to the provisions of the PMS Regulations,” the regulator said in an informal guidance made public on Monday.

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