Securities and Exchange Board of India (SEBI) allowed AIFs (alternative investment funds) to pledge their shares in investee companies in the infrastructure sector.

Banking & Finance

Securities and Exchange Board of India (SEBI) allowed AIFs (alternative investment funds) to pledge their shares in investee companies in the infrastructure sector. The regulator has also provided additional flexibility to AIFs and their investors to deal with unliquidated investments of their schemes. Category I and Category II AIFs may create an encumbrance on equity of investee company, which is in the business of development, operation or management of projects in any of the infrastructure sub-sectors. SEBI existing schemes of category I and category II AIFs who have not on-boarded any investors prior to April 25, 2024, may create an encumbrance on the equity of the investee company for the purpose of borrowing of the investee company. During the liquidation phase of a scheme, an AIF can give unsold investments to investors or go into dissolution, but it needs approval from at least 75 percent of investors by value. Before getting investor consent, the AIF/manager must arrange bids for at least 25 percent of the unliquidated investments' value.


      The regulator has decided to provide a one-time flexibility to schemes of AIFs whose liquidation period has expired or will expire by 24 July 2024.

      Such schemes will get a new liquidation period until April 24, 2025.

     

 

     


Securities and Exchange Board of India (SEBI)

Chairman- Madhabi Puri Buch
HQ- Mumbai
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