Sebi simplifies requirements for grant of accreditation to AIF investors
SEBI simplified the accredited investor framework for AIFs, allowing agreements before certification, easing documentation norms and reducing bottlenecks, while preserving prudential safeguards and corpus rules to promote ease of doing business in...
By Shivendra Kumar, ETMarkets.com |
ETMarkets.com
Market regulator Securities and Exchange Board of India (SEBI) on Thursday announced a further simplification of the accredited investor framework to ease operational bottlenecks for Alternative Investment Funds (AIFs) while maintaining prudential safeguards.
Under the revised norms, Sebi has allowed AIF investment managers to finalise and execute contribution agreements with investors even before the latter receive formal accreditation certificates from recognised agencies. However, any commitment made by such investors will not be counted towards the scheme’s corpus until accreditation is obtained, and funds can be accepted only after the certificate is issued. The regulator said this ensures that key prudential norms linked to corpus size are not compromised.
Sebi also said that schemes of AIFs will receive funds from these investors only after they obtain accreditation certificate from an accreditation agency.
The securities market watchdog has also relaxed documentation requirements for accreditation based on net-worth criteria. The earlier mandate to submit a detailed break-up of net worth as an annexure to the net-worth certificate has been done away with. In addition, it has been clarified that it is optional for a chartered accountant to specify the exact net worth amount, as long as the certificate confirms that the investor meets the prescribed threshold.
Also read: Sebi sets up working group to frame technology roadmap for market infrastructure
The regulator further mandated trustees, sponsors and managers of AIFs to ensure compliance with these revised provisions in their Compliance Test Reports.
The above tweaks were made via a circular issue today which has become effective today.
The move comes as part of Sebi's endeavor to promote ease of doing business.
The capital markets regulator on Thursday allowed stock brokers to undertake activities under the regulatory framework of other financial regulators. The initiative aimed at improving ease of doing business, forms part of Sebi’s revamped stock brokers’ regulations notified yesterday, marking a comprehensive overhaul of norms that were more than 30 years old.
Read more: Sebi notifies revamped stock brokers’ rules as part of ease of doing business
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
Under the revised norms, Sebi has allowed AIF investment managers to finalise and execute contribution agreements with investors even before the latter receive formal accreditation certificates from recognised agencies. However, any commitment made by such investors will not be counted towards the scheme’s corpus until accreditation is obtained, and funds can be accepted only after the certificate is issued. The regulator said this ensures that key prudential norms linked to corpus size are not compromised.
Sebi also said that schemes of AIFs will receive funds from these investors only after they obtain accreditation certificate from an accreditation agency.
The securities market watchdog has also relaxed documentation requirements for accreditation based on net-worth criteria. The earlier mandate to submit a detailed break-up of net worth as an annexure to the net-worth certificate has been done away with. In addition, it has been clarified that it is optional for a chartered accountant to specify the exact net worth amount, as long as the certificate confirms that the investor meets the prescribed threshold.
Also read: Sebi sets up working group to frame technology roadmap for market infrastructure
The regulator further mandated trustees, sponsors and managers of AIFs to ensure compliance with these revised provisions in their Compliance Test Reports.
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The above tweaks were made via a circular issue today which has become effective today.
The move comes as part of Sebi's endeavor to promote ease of doing business.
The capital markets regulator on Thursday allowed stock brokers to undertake activities under the regulatory framework of other financial regulators. The initiative aimed at improving ease of doing business, forms part of Sebi’s revamped stock brokers’ regulations notified yesterday, marking a comprehensive overhaul of norms that were more than 30 years old.
Read more: Sebi notifies revamped stock brokers’ rules as part of ease of doing business
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(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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