Millennium Post

Companies seeks SEBI approval for AIFs

As many as 20 entities have sought Sebi's approval to set up Alternative Investment Funds [AIFs], a newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds.

Sebi [Securities and Exchange Board of India] has already allowed seven AIFs to set shop in the country, all of which got their approvals from the market regulator last month.

As per the latest Sebi data, 20 applications were pending with Sebi for registration as AIFs as on 31 August  2012. The regulator had notified in May this year the guidelines for a new class of market intermediaries named AIFs, which are basically funds established or incorporated in India for the purpose of pooling in of capital from Indian and foreign investors for investing as per a pre-decided policy.

Out of the 20 pending applications, Sebi said 15 applications are 'being processed', while the regulator has sought further details from five others as they had provided 'incomplete information' as on 31 August.

Most of these applications were filed in August, while some were submitted in June and July as well.

Sebi last month decided that the promoters of listed companies can offload 10 per cent of equity to AIFs.


Capital market watchdog SEBI is looking into the possible use of Protected Cell Companies [PCCs] from places such as Mauritius, Cayman Islands and Seychelles for use of round-tripping of Indians’ money back into the capital market here in the form of overseas funds.

In 2010, SEBI had barred PCCs to invest in Indian markets through FII [Foreign Institutional Investor] route after it came across instances where certain Indians had used these entities to route their money back into markets as FII funds.

However, the market regulator now fears that funds structured as PCCs, which are legal entities in places like Mauritius, might be looking at a re-entry into Indian markets through routes like Foreign Venture Capital Funds and other avenues for the purpose of round-tripping of funds, a senior official said. PCCs are specially designed entities that might comprise of various cells, having funds of various investors, in such a manner that there is legal segregation and protection of assets and liabilities for each cell.

Also, the insolvency of one cell does not affect the business of the entire PCC or that of the other cells.
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