Sebi issues norms for large value AIFs
Premium- LVFs are alternative investment funds (AIFs) that invest in stocks of big US companies that are less expensive or growing more slowly than other large-cap stocks.
The Securities and Exchange Board of India (Sebi) on Friday issued guidelines for large value funds (LVFs) for accredited investors.
LVFs are alternative investment funds (AIFs) that invest in stocks of big US companies that are less expensive or growing more slowly than other large-cap stocks.
Entities with a combination of at least ₹1 crore annual income and a net worth of ₹5 crore, with at least half in financial assets, can become an accredited investor. For trusts other than family trusts, as well as for corporates, a net worth of at least ₹50 crore would be required to qualify as accredited investors.
All AIFs must ensure that they designate as compliance officer an employee or director not holding the post of chief executive officer or manager of the fund, according to the regulator’s guidelines. The compliance officer will be in charge of ensuring that the requirements of the Sebi Act, AIF Regulations, and circulars are being met.
Regulations permit LVFs to extend their tenure beyond two years, subject to the terms of the contribution agreement. Such conditions should be specified by the board from time to time, the regulator said. For this, an approval from the trustee/ board must be taken at least one month before expiration of the fund tenure or the extended tenure, it said.
Legal experts believe that the appointment of compliance officers will pose a problem for AIFs as it will be an added cost.