1. SEBI has reduced the minimum face value for bonds issued on a private placement basis from ₹1 lakh to ₹10,000. This will make the market much more accessible, especially for retail investors. An important milestone and testament to SEBI’s commitment to the growth of the bond market in India.
2. In a recent move towards enhancing the ease of doing business, SEBI, the regulatory authority, earlier this month hinted at simplifying processes and reducing compliance costs for filing changes in the Private Placement Memorandum (PPM) of Alternative Investment Funds (AIFs). Previously, AIFs had to engage Merchant Bankers to submit any PPM alterations to SEBI along with a due diligence certificate from the banker. However, SEBI's circular no. SEBI/HO/AFD/PoD/CIR/2024/028, issued on April 29, 2024, now allows certain changes to be directly filed with the regulator. These includes:
· Adjustments to fund size;
· Updates regarding affiliates, commitment periods, the key investment team of the manager, and key management personnel of the AIF;
· Reductions in expenses, fees, or costs charged to the fund or investors;
· Modifications to contact details of the AIF, sponsor, manager, trustee or custodian, auditor, RTA, legal advisor;
· Alterations to advisory boards, committees, or investment committees;
· Amendments to risk factors;
· Updates on the track records of the investment manager;
· Other factual and routine updates; among others
Furthermore, Large Value Funds for Accredited Investors (LVFs) are now exempt from the merchant banker requirement for notifying any changes in the PPM. Instead, they can directly file any alterations to the PPM, accompanied by a duly signed and stamped undertaking from the CEO of the AIF's Manager (or equivalent position holder) and the Compliance Officer of the AIF's Manager.
This new framework will be effective immediately, streamlining processes and reducing burdensome compliance costs for the AIFs.
3. Earlier, SEBI notified SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2024, to provide flexibility to AIFs and investors to deal with unliquidated investments of their schemes. SEBI has now allowed one-time flexibility to AIF schemes whose liquidation period has expired to deal with unliquidated investments. Thus, AIF schemes, whose liquidation period has expired or shall expire on or before July 24, 2024 shall be granted a fresh liquidation period till April 24, 2025
4. The RBI has notified investment Limits for the financial year 2024-25 in debt and sale of Credit Default Swaps by FPIs. The limits for FPI investment in government securities, state government securities and corporate bonds shall remain unchanged at 6 %, 2 % and 15 % respectively, of the outstanding stocks of securities for 2024-25. Further, the aggregate limit of the notional amount of Credit Default Swaps sold by FPIs shall be 5 % of the outstanding stock of corporate bonds.
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