SEBI revises alternative investment fund guidelines

SEBI has asked all AIFs to disclose the disciplinary history of the fund, its sponsor, manager, directors, partners, promoters and associates

Market regulator Securities and Exchange Board of India (SEBI) has revised certain guidelines for alternative investment funds (AIFs), including stricter disclosure requirements to bring in more transparency.


In a circular, SEBI said, "It has been decided to provide certain clarifications on the AIF regulations, increase transparency to the investors and provide reporting norms for AIFs.


SEBI has asked all AIFs to disclose the disciplinary history of the fund, its sponsor, manager, directors, partners, promoters and associates. The details should be included in the AIF’s placement memorandum.


Alternative investment funds or AIFs are basically 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.


These funds are required to provide details of pending and past cases (where the person has been found guilty) of litigations, criminal or civil prosecution, disputes and non-payment of statutory dues, among others.


“In case of operational actions such as administrative warnings/ deficiency letters, the same may be grouped together and summarised. However, if the investor seeks details of the summarised portion, the same shall be provided by the AIF to the investor,” the circular said.


Existing AIFs are required to send these details to their investors within 30 days.


Meanwhile SEBI has relaxed the reporting requirement for Category III AIFs with respect to their daily exposures.


Category-III AIFs are those trading with a view to making short-term returns and include hedge funds.


Modifying a previous circular, issued in July 2013, SEBI said all Category III AIFs shall report to the custodian the amount of leverage at the end of the day (based on closing prices) by the end of the next working day.


Currently, this category of AIFs are required to give the details to the custodian on the same day itself.


“It has been observed that with respect to reporting of amount of leverage at the end of the day, the AIF is dependent on various parties in order to calculate and submit to the custodian the amount of leverage at the end of the day.


“Such parties provide information at varied time periods due to which the AIFs are finding it difficult to report to the custodian the amount of end-of-day leverage on the same day,” the latest circular said.


Among others, AIFs are required to intimate SEBI within two days of receiving request for redemption from the client.


Iraq crisis: Obama says no to sending American combat troops

American forces will not be returning to combat in Iraq, but we will help Iraqis.  The US will help the country with 'targeted and precise military action' if required, says Obama

US President Barack Obama has made it clear that American combat troops will not return to Iraq to fight Islamic militants, who have seized a section of the country. He, however, assured Baghdad of launching 'targeted and precise military action' if required.


“American forces will not be returning to combat in Iraq, but we will help Iraqis as they take the fight to terrorists who threaten the Iraqi people, the region, and American interests as well,” Obama told reporters at a news conference after meeting with his top national security advisors.


He said, “We do not have the ability to simply solve this problem by sending in tens of thousands of troops and committing the kinds of blood and treasure that has already been expended in Iraq. Ultimately, this is something that is going to have to be solved by the Iraqis”.


Iraq had requested the US to help under the security agreement (between the two countries), and to conduct air strikes on the militants of the Islamic State of Iraq and Syria (ISIS), who have seized the country’s second largest city of Mosul and advancing towards the capital.


“It is in our national security interests not to see an all-out civil war inside of Iraq, not just for humanitarian reasons, but because that ultimately can be destabilising throughout the region,” Obama said even as he noted that he is prepared to carry on targeted and precision strikes.


“We will be prepared to take targeted and precise military action if and when we determine that the situation on the ground requires it,” he said.


The US, he said, also has an interest in making sure that there is no safe haven that continues to grow for Islamic State of Iraq and the Levant (ISIL) and other extremist jihadi groups who could use that as a base of operations for planning and targeting US.


“If they accumulate more money, they accumulate more ammunition, more military capability, larger numbers, that poses great dangers not just to allies of ours like Jordan, which is very close by, but it also poses... a great danger, potentially, to Europe and ultimately the US,” he warned.


US Secretary of State John Kerry said the US is committed to fight back the militants who are inching closer to Baghdad, but America’s efforts would be successful only if Iraqi leaders embrace a political process shunning differences.


He said the efforts made by the US “will only be successful if Iraqi leaders rise above their differences and embrace a political plan that defines Iraq’s future through the political process, not through insurgency and conflict.”


Meanwhile, Sunni radicals in Iraq, who have overrun a swathe of territory north of Baghdad in a lightning offensive, have taken control of one of Saddam Hussein’s former chemical weapons factories.


“We are aware that the ISIL has occupied the Al Muthanna complex,” State Department spokeswoman Jen Psaki said in a statement.


But she said she didn’t think the ISIL militants would be able to produce usable chemical weapons there, because any materials remaining are old and unwieldy.


SEBI asks Rose Valley to wind up scheme, pay investors

The market regulator has once again barred Rose Valley from collecting money as investment in real estate and construction and repay the money collected from investors within three months

Market regulator Securities and Exchange Board of India (SEBI) has asked West Bengal-based Rose Valley Real Estate and Construction Ltd to wind up its collective investment schemes (CIS), issued through its real estate and construction unit, and repay money to investors within three months.


SEBI in an order, said, “….Rose Valley Real Estates and Constructions Ltd and its promoters/ directors, Gautam Kundu, Shibamoy Dutta, Ram Lal Goswami, Abir Kundu and Ashok Kumar Saha are directed to not to access the securities market and are further restrained and prohibited from buying, selling or otherwise dealing in the securities market till all collective investment schemes launched by Rose Valley Real Estates and Constructions Ltd are wound up and all the monies mobilised through it are refunded to the investors”.


Apart from these, Rose Valley has been asked to submit the 'trail of funds claimed to be refunded, “bank account statements indicating refund” to investors and “receipt from the investors acknowledging such refund.”


According to the SEBI order, the money collected by RVRECL through a scheme called 'Ashirbad' has increased to Rs2,016.32 crore from Rs1,358 crore during 1 April 2010 to 31 March 2011.


The scheme, SEBI points out, falls within the purview of the “collective investment scheme” definition of the market regulator.


Rose Valley had claimed that the CIS was discontinued in 2010.


Earlier in January 2011, SEBI had barred Rose Valley Real Estates & Construction from raising money from the public. The company was raising funds from the public in certain areas of West Bengal in the name of sale of plots of land under its Ashirbad scheme.


A Rose Valley spokesperson has however claimed that it will move to Special Appellate Tribunal (SAT) against the SEBI order. It would also question the figure of Rs2,000 crore of deposits that the market regulator claims it to have raised, says a report from the Hindu Business Line.


“Repayments are made every day and at present the company is yet to pay Rs175 crore of an earlier mentioned amount of Rs1,274 crore. The repayment would be made over the next three months in accordance with the SEBI order,” he said adding that there hasn’t been a single investor complaint against the company on non-repayment of dues.


However, SEBI in its order has mentioned that Rose Valley has till date not provided any documentary evidence to substantiate its claim that it has refunded the money to the investors.


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