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SEBI has done away with the limit on contribution from Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Resident Indians (RIs) in AIFs operating in IFSC.
The market regulator has allowed AIFs operating in International Financial Service Centers (IFSCs) in India to receive 100% aggregate contribution as Foreign Portfolio Investors (FPIs) from NRIs, OCIs and RIs. Earlier this limit was less than 50%.
AIFs wanting to have more than 50% contribution from Indian born individuals and non-individuals will have to submit a declaration stating its intention to have the aggregate contribution of NRIs, OCIs and RIs above 50% to its Designated Depository Participant (DDP). The regulator also clarified that existing FPIs can make changes and submit their declaration within the next 6 months to their DDPs.
Here are other key changes:
- AIFs will have to provide PAN card copies of all the overseas-based investors. If an NRI/OCI investor does not have PAN, the AIF will have to submit a declaration that he does not have a PAN or taxable income in India
- For RI investors, they will have to submit a declaration that they are exempted from obtaining PAN
- NRIs will be required to submit a copy of their passport while OCIs will have to submit a copy of their OCI card. RIs can submit any identity document issued by the Govt. of India like Aadhaar card, passport etc.
- In case of non-individual investors, AIFs will provide the PAN or suitable declaration and identity documents to their DDPs
- There must be minimum of 20 investors in AIF at any time with each investor contributing maximum of 25% of the corpus