Giving clarity to AIFs on appointment of investment committee, SEBI said that while the fund manager has to take investment decision, the members of investment committee will be held responsible if anything happens.
SEBI said, “The members of investment committee shall be equally responsible as the manager for investment decisions of the AIF. The manager and members of investment committee shall jointly and severally ensure that the investments of AIF are in compliance with the regulations, the terms in placement memorandum and agreement with investor.”
Earlier this month, SEBI has asked AIFs to constitute an investment committee to approve investment decisions of fund managers. The committee will be responsible for making investment processes & decisions and defining role of fund managers.
Further, the market regulator has clarified that AIFs can appoint external members with consent of at least 75% of investors by value of their investment in the AIF scheme.
Another clarification is relaxation in terms of experience of fund managers to manage AIFs. SEBI has clarified that AIFs can consider collective experience of the entire investment team to meet the eligibility criteria to manage AIFs.
However, SEBI said that at least one personnel of the key investment team of the AIF should have adequate experience of five years in advising or managing pool of assets. In addition, at least one key personnel of investment team should have professional qualification in finance, accountancy, business management, commerce, economics, capital market or a CFA charter from the CFA institute.