Calculation of investment concentration norm for Category III AIFs
Summary
This circular amends the calculation method for investment concentration norms for Category III Alternative Investment Funds to allow flexibility between investable funds and net asset value. Existing Category III AIFs must obtain internal approval and inform investors within 30 days if they opt for the investable funds basis. The chosen calculation basis must be disclosed in the placement memorandum and cannot be changed during the scheme's term.
Text
Regulation 15(1)(d) of SEBI (Alternative Investment Funds) Regulations, 2012 has been amended to provide flexibility to Category III AIFs to calculate investment concentration norm based either on investable funds or net asset value (“NAV”) of the scheme while investing in listed equity of an investee company.
Existing Category III AIFs may opt for calculating investment concentration norm based on investable funds with the approval of their trustees or board of directors or designated partners, as the case may be, and inform the same to their investors within 30 days from the date of the issuance of this circular.
All Category III AIFs shall disclose the basis for calculation of investment concentration norm in the placement memorandum of their schemes.
The basis for calculating investment concentration norm shall not be changed during the term of the scheme.
Category III AIFs which choose to calculate investment concentration norm based on NAV, shall comply with para 2 of SEBI circular no. SEBI/HO/IMD/IMD-I/DOF6/P/CIR/2021/663 dated November 22, 2021.
Source: SecMarx — Calculation of investment concentration norm for Category III AIFs. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.