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SEBI has allowed AIF managers to consider ‘A’ rated and below debt securities as unlisted securities.
This has come after SEBI realized that the new regulations required companies that have issued listed debt securities to issue all future debt in a listed form only. This means that the availability of unlisted debt securities will reduce, making it difficult for AIFs to follow their investment rules.
Hence, SEBI has decided that if a Category II AIF invests in listed debt securities rated ‘A’ or lower, it will be counted as unlisted. This change will help AIFs follow the rules and also encourage investment in lower-rated debt securities, said SEBI.
As per SEBI rules, Category II AIFs must invest a major part of their funds in unlisted securities (securities not traded on stock exchanges).
