Wednesday, 18 July 2018

Overseas Investment by Alternate Investment Funds and Venture Capital Funds


The Securities and Exchange Board of India (‘SEBI’) issued a circular on July 3, 2018 regarding overseas investment by Alternate Investment Funds (AIFs) and Venture Capital Funds (VCFs). The provisions of this circular became applicable from July 2, 2018.

SEBI vide a circular dated October 1, 2015 had allowed overseas investment by AIFs and VCFs to the extent of USD 500 million. In consultation with the RBI, the said limit has been increased to USD 750 million. Additionally, in order to monitor the utilization of overseas investment limits, AIFs and VCFs have to mandatorily disclose the following by reporting them on the SEBI intermediary portal (https://siportal.sebi.gov.in):
1.           The utilization of the overseas limits within 5 working days of such utilization.
2.           In case the overseas limit has not been utilized within 6 months from the date of SEBI approval (‘validity period’), the same has to be reported within 2 working days after expiry of the validity period.
3.           In case a part of the overseas limit has not been utilized within the validity period then the same has to be reported within 2 working days after expiry of the validity period.
4.           In case an AIF/ VCF wishes to surrender the overseas limit during the validity period, it has to be reported within 2 working days from the date of decision to surrender the limit.

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