https://en.bharatpedia.org/w/api.php?action=feedcontributions&feedformat=atom&user=171.79.33.187Bharatpedia - User contributions [en]2026-09-03T21:39:34ZUser contributionsMediaWiki 1.43.6https://en.bharatpedia.org/w/index.php?title=Securities_and_Exchange_Board_of_India_(Alternative_Investment_Funds)_Regulations,_2012&diff=154882Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 20122019-11-26T08:28:40Z<p>171.79.33.187: /* Summary */</p>
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<div>{{Use dmy dates|date=September 2019}}<br />
{{Use Indian English|date=September 2019}}<br />
'''Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012''' (also called '''AIF Regulations''') are a set of regulations introduced by [[Securities and Exchange Board of India]] (SEBI) in 2012, to regulate [[pooled investment]] funds in [[India]], such as [[real estate]], [[private equity]] and [[hedge fund]]s.<ref name=HinduPermts>{{cite news|title=SEBI permits 123 alternative investment funds to operate in India|url=http://www.thehindubusinessline.com/markets/sebi-permits-123-alternative-investment-funds-to-operate-in-india/article6651625.ece|accessdate=17 April 2015|work=[[The Hindu Business Line]]|date=1 December 2014}}</ref><br />
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==Summary==<br />
These regulations apply to all pooled investment funds registered in India which received capital from Indian or foreign investors.<ref name=HinduPermts/> These were made to regulated funds that were not covered under the [[Securities and Exchange Board Of India (Mutual Funds) Regulations, 1996|SEBI (Mutual Funds) Regulations, 1996]]; SEBI (Custodian Of Securities) Regulations, 1996 and any other regulations of SEBI.<ref name="S.">{{cite book|author=Pratap Giri S.|title=Investment Banking|url=https://books.google.com/books?id=ua2tAAAAQBAJ&pg=PT233|accessdate=17 April 2015|publisher=Tata McGraw-Hill Education|isbn=978-1-259-05872-1|page=233}}</ref> This was introduced to bring unregistered funds in India under the ambit of law. Prior to the introduction of this, many funds were operating in India that could not be classified as domestic [[venture capital]] funds (VCF), foreign venture capital investors (FVCI) or foreign [[institutional investor]] (FII).<ref name="S."/> After introduction of these regulations in July 2012, 123 entities registered themselves by November 2014.<ref name=HinduPermts/><br />
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The Alternative Investment Funds (AIFs) have been categorised into three classes:<br />
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* ''Category I'': These funds receive incentives from the government. These include [[Social venture capital|social venture fund]]s, [[Infrastructure debt|infrastructure fund]]s, [[Venture capital|venture capital fund]]s and [[SME finance|SME fund]]s.<ref name=HinduPermts/><br />
* ''Category II'': These funds are allowed to invest anywhere in any combination, but cannot take debts, except for day-to-day operation purposes. These include [[private equity]] funds and [[Bond fund|debt funds]].<ref name=HinduPermts/><ref name="S."/><br />
* ''Category III'': Funds that make short-term investments and then sell, like [[hedge fund]]s, come under this.<ref name=HinduPermts/><br />
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AIFs are usually marketed towards high net-worth persons. The minimum investment from one person is {{Currency|10000000|INR}}. The minimum corpus of the funds is {{currency|200000000|INR}}. At any time, not more than 1000 investors are allowed. The initial contribution of the [[Investment management|fund manager]] or [[Corporate promoter|promoter]] should be 2.5% or {{currency|50000000|INR}}, whichever is less (for category 1 and 2) and 5% or {{currency|100000000|INR}} for Category 3 AIF<ref name=Dejargoned>{{cite news|title=De-jargoned: Alternative investment funds|url=http://www.livemint.com/Money/WMWedyfbu45PPubMcUURyN/Dejargoned-Alternative-investment-funds.html|accessdate=17 April 2015|work=[[Live Mint]]|date=4 March 2015}}</ref><br />
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In the [[2015 Union budget of India]], it was announced that [[foreign direct investment]]s (FDI) would be allowed in AIFs. It was also announced that the tax liability will be shifted from the funds to the investors in Category I and Category II.<ref name=FDi>{{cite news|title=Govt to allow FDI in alternative investment funds|url=http://www.thehindubusinessline.com/economy/budget/govt-to-allow-fdi-in-alternative-investment-funds/article6946169.ece|accessdate=17 April 2015|work=[[The Hindu Business Line]]|date=28 February 2015}}</ref><br />
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==See also==<br />
* [[Securities Laws (Amendment) Bill, 2014]], a law introduced in 2014 to check fraudulent funds<br />
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==References==<br />
{{Reflist}}<br />
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==Further reading==<br />
* {{cite web|title=Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012|url=http://www.sebi.gov.in/cms/sebi_data/attachdocs/1337601524196.pdf|publisher=[[The Gazette of India]]}}<br />
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{{Indian legislations}}<br />
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[[Category:Securities and Exchange Board of India]]<br />
[[Category:Indian business law]]</div>171.79.33.187