SEBI Releases Framework for AIFs

Current Context: The Securities and Exchange Board of India (SEBI) issued a framework enabling Alternate Investment Funds (AIFs) to raise money from Foreign Portfolio Investors (FPIs).

• The new framework was issued under Section 10(a) of the SEBI (Alternate Investment Funds) Regulations 2012.
• According to the regulation, the following will be considered FPI:

1. The security market regulator of that country must have signed an MoU with the International Organization of Securities Commission (IOSCO) or
2. The security market regulator of that country must have signed an MoU with the SEBI.

• The SEBI also notified that investors contributing 25% or more, must not belong to:

1. The sanctioned list of the United Nations Security Council (UNSC)
2. The country identified in the public statement of the Financial Action Task Force (FATF)

• It further mentioned that if an investor who is already on board, doesn’t meet the specified condition, then the AIF will bare capital contribution until the investor becomes eligible.
• SEBI is a government-owned regulatory authority that was established in 1992 with Mumbai as its headquarters. The current Chairperson of the body is Madhabi Puri Buch.

Question:

Q.1 Which of the following recently issued a framework enabling Alternate Investment Funds (AIFs) to raise money from Foreign Portfolio Investors (FPIs)?
a. SEBI
b. RBI
c. SIDBI
d. NABARD