INDIA: SEBI seeks clarity on application of India FDI policy to AIFs

Friday January 4 2013

It is being reported that the Securities and Exchange Board of India has asked the government to allow India foreign investment into alternative investment funds.

SEBI has reportedly written to the finance ministry as well as the department of industrial policy and promotion under the commerce ministry, seeking clarity on the India FDI policy. Guidelines on AIFs were notified in May 2012 but as yet there has been no official clarification on whether they are covered by the India FDI Policy. The Policy as currently drafted specifies the foreign investment requirements for venture capital funds, which have been superceded by the new AIF framework, however currently there is a lack of clarity on downstream investments by AIFs having foreign funds.

This information will be updated as further details become available.