Sebi rationalises reporting requirements for alternative investment funds

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April 7, 2021 10:28 PM

Markets regulator Sebi on Wednesday rationalised the reporting requirements for alternative investment funds


Markets regulator Sebi on Wednesday rationalised the reporting requirements for alternative investment funds in order to provide ease of compliance for such entities. Alternative Investment Funds (AIFs) will have to submit report on their activities on a quarterly basis. The report has to be submitted within 10 days from the end of a quarter and the new requirement will be effective from the quarter ending December 31, 2021, as per a circular.

Further, Category-III AIFs have to submit a report on leverage undertaken, on a quarterly basis, in revised formats. Category-III AIFs are those trading with a view to making short-term returns and include hedge funds. Earlier, category-I and II as well as category-III AIFs, which do not employ leverage, were required to comply with reporting norms on a quarterly basis. Category-III AIFs, which undertake leverage, were required to submit a report to Sebi on a monthly basis.

The regulator also said that any changes in terms of private placement memorandum and in the documents of the fund/ scheme should be intimated to investors and Sebi on a consolidated basis, within one month from the end of a financial year. “Such intimation shall specifically mention the changes carried-out in the private placement memorandum and the documents of the fund/ scheme, along with the relevant pages of revised sections/ clauses,” Sebi said.

The provisions, which modifies a circular issued in July 2014, would be effective immediately. As per the 2014 circular, the changes were to be intimated once every six months on a consolidated basis. “To provide ease of compliance,it has been decided to review and rationalise the existing regulatory reporting requirements,” Sebi said in the circular on Wednesday.

The changes have been decided upon after consultation with various stakeholders and recommendation of Alternative Investment Policy Advisory Committee. AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors.

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