Sebi provides clarity on alternate investment fund norms

NEW DELHI: Markets regulator Sebi has clarified that category II and III alternative investment funds (AIFs) established as a trust may qualify as qualified buyer and subscribe to security receipts issued by asset reconstruction company.

The clarification came on Monday as part of an informal guidance sought by SREI Multiple Asset Investment Trust (SMAIT) with respect to AIF norms.

SMAIT had said it is a trust and is registered with Sebi as a category II AIF.

In its query, SMAIT said the existing Sebi norms limit qualified buyers only to those AIFs which are body corporate and asked if it qualifies as a qualified buyer and can invest/ acquire security deposits being a trust.

Considering the submissions, Sebi stated that as per the existing regulatory framework, category II and III AIFs established as a "trust" may qualify as "qualified buyer" under the SARFAESI Act and subscribe to security receipts issued by asset reconstruction company, subject to other regulatory norms.

Noting that this position is based on the information furnished, Sebi said, "different facts or conditions might lead to a different interpretation".

It added that the views have been expressed only with respect to clarification sought on AIF norms and do not affect the applicability of any other law, regulations, guidelines and circulars of Sebi or laws administered by any other authority.