Category III AIFs: Sebi provides clarity on calculation of investment concentration

Markets regulator Sebi on Monday said Category III Alternative Investment Funds (AIFs) can opt for calculating their investment concentration norm based on investable funds subject to certain conditions.

The watchdog has issued a circular on calculation of investment concentration norm for Category III AIFs. Various funds like hedge funds are registered in this category and those funds employ diverse or complex trading strategies.

In a circular, Sebi said all Category III AIFs should disclose the basis for calculation of investment concentration norm in the placement memorandum of their schemes.

Also, they should not change the basis for calculating investment concentration norm during the term of the scheme.

Existing Category III AIFs may opt for calculating investment concentration norm based on investable funds with the approval of their trustees or board of directors or designated partners, as the case may be, and inform the same to their investors within 30 days from the date of the issuance of this circular, ‚ÄĚSebi said.

Earlier this month, the regulator amended regulations to provide flexibility to Category III AIFs to calculate investment concentration norm based on either investable funds or Net Asset Value (NAV) of the scheme while investing in listed equity of an investee company.

.

Leave a Comment