Sebi doubles overseas investment limit of AIF, VCF to USD 1,500 mn

Currently, Sebi-registered alternative investment fund (AIF) or venture capital fund (VCF) are permitted to invest overseas, subject to an overall limit of USD 750 million.

New Delhi: Markets regulator Sebi on Friday doubled the overseas investment limit of alternative investment funds and venture capital funds to USD 1,500 million.

The decision has been taken in consultation with the Reserve Bank of India, the Securities and Exchange Board of India (Sebi) said in a circular.

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Currently, Sebi-registered alternative investment fund (AIF) or venture capital fund (VCF) are permitted to invest overseas, subject to an overall limit of USD 750 million.

“…the said limit has now been enhanced to USD 1,500 million,” Sebi noted.

Under the rules, AIFs and VCFs need to mandatorily disclose the utilisation of overseas investment limits within five working days of such usage on the market regulator’s intermediary portal.

In case an AIF or venture capital fund (VCF) has not utilised the overseas limit granted them within 6 months from Sebi’s approval, the same needs to be reported within two working days after expiry of the validity period.

Further, if an AIF or VCF wishes to surrender the overseas limit at any point of time within the validity period, the same needs to be reported within two working days from the date of decision to surrender the limit.

AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy, while VCFs are investment funds that manage the money of investors who seek private equity stakes in start-ups.

Earlier in October 2015, the regulator had allowed overseas investment by AIFs and VCFs to the extent of USD 500 million.