Operating Guidelines for Alternative Investment Funds in International Financial Services Centres
Summary
This circular establishes operating guidelines for Alternative Investment Funds (AIFs) registered in International Financial Services Centres (IFSC). It mandates compliance with SEBI AIF Regulations while introducing specific requirements for corpus, minimum investments, and custodian appointments. The document also outlines fee structures and eligibility criteria for sponsors, managers, and angel investors.
Text
Any fund established or incorporated in IFSC in the form of a trust or a company or a limited liability partnership or a body corporate, can seek registration under the provisions of SEBI (Alternative Investment Funds) Regulations, 2012.
An application for grant of certificate shall be made in accordance with the provisions of Chapter II of AIF Regulations, accompanied by a non-refundable application fee as stated in para 15 of this Annexure.
The Board may grant certificate under any specific category of AIF, if it is satisfied that the applicant fulfills the requirements as specified in AIF Regulations.
Any person as specified in sub-clause (1) of clause 22 of SEBI IFSC Guidelines may invest in AIFs operating in IFSC.
An AIF operating in IFSC is permitted to make investment in terms of sub-clause (3) of clause 22 of SEBI IFSC Guidelines... Now, such AIFs may invest in India through the Foreign Venture Capital Investor or Foreign Direct Investment (FDI) route also...
Each scheme of the AIF shall have corpus of at least USD three million;
The AIF shall accept from an investor, an investment of value not less than USD one hundred and fifty thousand : Further, for investors who are employees or directors of the AIF or employees or directors of the Manager, the minimum value of investment shall be USD forty thousand.
The Manager or Sponsor shall have a continuing interest in the AIF of not less than two and half percent of the corpus or USD seven hundred and fifty thousand, whichever is lower... Further, for Category III AIF, the continuing interest shall be not less than five percent of the corpus or USD 1.5 million, whichever is lower.
An AIF set up in IFSC may invest in the units of other AIFs set up in IFSC and India subject to the provisions of AIF Regulations.
A Sponsor / Manager of an existing AIF in India may act as a Sponsor / Manager of an AIF set up in the IFSC by : i) setting up a branch in the IFSC; or ii) incorporating a company or limited liability partnership in the IFSC
The Sponsor or Manager of an AIF (Category I and II) shall appoint a custodian registered with the Board for safekeeping of securities if the corpus of the AIF is more than USD seventy million. It will be mandatory for Category III AIF to appoint a custodian.
An angel fund shall have a corpus of at least USD seven hundred and fifty thousand.
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Source: SecMarx — Operating Guidelines for Alternative Investment Funds in International Financial Services Centres. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.