Enhanced ODI Limits for AIFs and VCFs

By Simran Jalan (corplaw@vinodkothari.com)

Background

The Securities and Exchange Board of India (SEBI) came out with a circular on July 3, 2018[1] (Circular) to liberalise the regulatory regime surrounding overseas investments by Alternative Investments Funds (AIF) and Venture Capitals Funds (VCF). However, before we delve further into the contents of the notification, let us have a quick discussion on what AIFs and VCFs are.

AIFs are privately pooled investment vehicles established in India and registered with the SEBI and is not a mutual fund or collective investment scheme. AIFs can be of following three categories –

  1. Category I – These funds invest only in early stage start-ups.
  2. Category II – Category II AIFs shall include AIFs which do not fall in Category I and III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements
  3. Category III – These include AIFs which employ diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives.

Read more

Indian Valuation Standards: Standardizing the rules of valuation in India

MCA raises curtain on SBO Rules – Notifies final rules with several changes.

CS Vinita Nair, vinita@vinodkothari.com

CS Nikita Snehil, nikita@vinodkothari.com

Vinod Kothari & Co. | June 14, 2018

Amendment to Section 89 and 90 is one of the key amendments proposed in Companies (Amendment) Act, 2017 (Amendment Act). While, the Amendment Act is being enforced in phases, stakeholders were given the option to provide the public comments on the draft rules[1] in relation to Significant Beneficial Ownership (SBO), which was issued by MCA on Feb 2, 2018. Thereafter, on June 6, 2018, MCA vide its Notification, has enforced the provisions of amended Section 90 of the Companies Act, 2013 and also issued the Companies (Beneficial Interest and Significant Beneficial Interest) Rules, 2018[2] (‘Final Rules’) in relation to SBO. This is one of the most onerous provision rolled out by MCA. The purpose of this Section is to ask companies ‘Parde ke peeche kaun hai? Saamne aao!’. The present Article explains the provisions of the amended Section 90 and the Final Rules. Read more