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In its board meeting, SEBI has decided to allow AIF companies to liquidate their illiquid assets within one year from the expiry of liquidation period.
With this, AIFs can hold illiquid assets in the scheme instead of creating a segregated scheme.
Among other key decisions at SEBI board meeting relevant to distribution community were:
- SEBI has allowed Category I and II AIFs to pledge equity shares of investee companies in infrastructure sector. This move is intended to help investee companies raise capital and facilitate infrastructure development and private capital investment in the country
- To curb the misuse of AIF regulations, SEBI has approved the proposal for enhancing due diligence of AIFs, key management personnel of AIFs and their managers while ensuring ease of doing business
- Privately placed InvITs can now issue subordinate units to facilitate purchase of infrastructure assets. Subordinate units are the units issued to the sponsor for the valuation gap if agreed upon by the investors/unitholders. The creation and issuance of subordinate units primarily aim to close potential valuation gaps arising from differences in asset valuation perceptions between the sponsor and the REIT/InvIT