Amendments in Deposits, Corporatisation of Unregistered entities
/0 Comments/in Amendments to the Companies Act 2013, Companies Act 2013, Corporate Laws /by Vinod Kothari ConsultantsEnhanced ODI Limits for AIFs and VCFs
/0 Comments/in SEBI /by Vinod Kothari ConsultantsBy 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 –
- Category I – These funds invest only in early stage start-ups.
- 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
- Category III – These include AIFs which employ diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives.
PPT on SBO Rules and layers of subsidiaries
/0 Comments/in Amendments to the Companies Act 2013, Corporate Laws /by Vinod Kothari ConsultantsEntities to report total foreign investments to RBI
/0 Comments/in FEMA /by Vinod Kothari ConsultantsSBO Rules dilute the intent of Section 90
/0 Comments/in Amendments to the Companies Act 2013, Companies Act 2013, Corporate Laws /by Vinod Kothari ConsultantsSBO Rules in contradiction to Section 90
/0 Comments/in Amendments to the Companies Act 2013, Companies Act 2013, Corporate Laws /by Vinod Kothari ConsultantsInvestment by FPIs in securitised debt instruments
/0 Comments/in Capital Markets, FEMA, Securitisation /by Vinod Kothari ConsultantsBy Anita Baid,(anita@vinodkothari.com)(finserv@vinodkothari.com)
Investments by Foreign Portfolio Investors (FPIs) in unlisted debentures and securitised debt instruments (SDIs) issued by Indian companies was allowed pursuant to SEBI notification dated 27th February, 2017[1]. Earlier in November, 2016, Reserve Bank of India (RBI) had also permitted investment by FPIs in unlisted non-convertible debentures and securitised debt instruments issued by Indian companies[2]. The said amendments by the securities market regulator and financial services regulator were the final push which was needed to encourage more FPI investments in India.
Previously, FPIs could invest only in debt securities of companies engaged in the infrastructure sector. This was a clear indication that the government aimed to develop the infrastructure sector in India. But eventually, it seemed that the government did not want to restrict this to infrastructure only and wanted to reap all the benefits for developing a dynamic and facilitating bond market in the country.
Economic development and smooth flow of funds into the economy are the twin sides of the same coin and the government of India has very well taken this into account while amending the FPI regulation. Allowing FPI investments in unlisted debt instruments of Indian companies, was a step by the government to relax the burden which the companies had to bear, while raising funds in the form of equity. The regulation in turn blocked the companies from tapping into fresh funds and listing of debt instruments, which called for additional burden of complying with a host of other regulations.
Indian Valuation Standards: Standardizing the rules of valuation in India
/0 Comments/in Accounting and Taxation, Companies Act 2013, Corporate Laws, Indian Accounting Standards (Ind AS), Valuations /by Vinod Kothari ConsultantsRefer to valuation approaches here- https://vinodkothari.com/2020/09/valuation-approaches-and-methods/
