Market regulator Securities and Exchange Board of India (SEBI) has decided to seek activity report on quarterly basis from alternative investment funds (AIFs).
In a release, the market regulator says, “… decided that all AIFs shall submit reports on their activity as an AIF to SEBI on a quarterly basis within 10 calendar days from the end of each quarter in the revised formats. The changes have been decided upon after consultation with various stakeholders and the recommendation of the Alternative Investment Policy Advisory Committee.”
AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors.
As per the SEBI circular, the new requirement will be effective from the quarter ending 31 December 2021.
Additionally, category-III AIFs have to submit a report on leverage undertaken, on a quarterly basis, in revised formats. Category-III AIFs are those trading with a view to making short-term returns and include hedge funds.
Earlier, category-I and II as well as category-III AIFs, which do not employ leverage, were required to comply with reporting norms on a quarterly basis. category-III AIFs, which undertake leverage, were required to submit a report to SEBI on a monthly basis.
The market regulator further says that any changes in terms of private placement memorandum and in the documents of the fund or scheme should be intimated to investors and SEBI on a consolidated basis, within one month from the end of a financial year.
“Such intimation shall specifically mention the changes carried-out in the private placement memorandum and the documents of the fund or scheme, along with the relevant pages of revised sections and clauses,” the regulator said.
The provisions, which modifies a circular issued in July 2014, would be effective immediately. As per the 2014 circular, the changes were to be intimated once every six months on a consolidated basis.
“To provide ease of compliance, it has been decided to review and rationalise the existing regulatory reporting requirements,” SEBI says in the circular.