The Securities and Exchange Board of India (“SEBI”) has in a recent notification dated 10th May 2019 brought about changes to the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. The amendments are called the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019.
Key Highlights:
- The Category III Alternative Investment Funds may now deal in goods received in delivery against physical settlement of commodity derivatives. This is in addition to the earlier position which allowed Category III Alternative Investment Funds to invest in securities of listed or unlisted investee companies or derivatives or complex or structured products and in units of Category I or Category II Alternative Investment Funds.
- In addition to safekeeping of securities, the custodian appointed by Category III Alternative Investment Fund is now required to keep custody of securities and goods received in delivery against physical settlement of commodity derivatives.
- The following definitions have been added for the purpose of the Regulation:
- “Custodian” means a person who has been granted a certificate of registration to carry on the business of custodian under the Securities and Exchange Board of India (Custodian) Regulations, 1996
- “goods” means the goods notified by the Central Government under clause (bc) of section 2 of the Securities Contracts (Regulation) Act, 1956 and forming the underlying of any commodity derivative
Source: Securities and Exchange Board of India
