New Delhi, Jan 9: Markets regulator Sebi on Friday simplified the process for granting accreditation to investors under the alternative investment fund (AIF) framework.
Flexibility for investment managers
Under this, investment managers are allowed to execute contribution agreements and complete related formalities based on their own assessment of an investor’s eligibility, even if the investor has not yet received the formal accreditation certificate, Sebi said in its circular.
Corpus inclusion only after certification
However, the investor’s commitment will not be counted towards the scheme’s corpus until the accreditation certificate is issued, and the AIF can accept funds only after the investor becomes formally accredited.
Net-worth disclosure norms relaxed
Further, for accreditation based on net-worth criteria, Sebi has abolished the requirement to submit a detailed break-up of net worth. It is now optional for a chartered accountant to state the actual net worth, provided the certificate confirms that the prescribed threshold is met.
Compliance reporting mandated
Trustees, sponsors and managers of AIFs will have to ensure that compliance with these changes is captured in the Compliance Test Report.
Immediate implementation
These revised norms are applicable with immediate effect, the Securities and Exchange Board of India (Sebi) said.
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Background to the move
In August, Sebi’s Whole Time Member Ananth Narayan G stated that the regulator proposed a new accredited investors-only AIF regime with fewer compliance rules, a move aimed at enabling sophisticated investors to back higher-risk ventures more efficiently.
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