%20(500%20%C3%97%20280%20px)%20(500%20x%20300%20px)%20(36).png "New Guidelines for Borrowing by Category-I and Category-II AIFs and LVF Tenure Extension by SEBI")
- Key Points:
- Borrowing Guidelines for AIFs:
- Category-I and Category-II AIFs can now borrow up to 10% of their investable funds.
- Borrowing is allowed for temporary funding needs and day-to-day operational requirements, but only for a maximum of 30 days.
- Borrowing can occur no more than four times a year.
- The intention to borrow must be clearly stated in the AIF’s Private Placement Memorandum (PPM).
- LVF Tenure Extension:
- The maximum permissible limit for the extension of tenure for LVFs is up to five years, subject to the approval of two-thirds of the unit holders by value of their investment.
- LVFs must align with this five-year limit by November 18, 2024.
- These changes aim to provide greater operational flexibility and ease of doing business for AIFs and LVFs.
Question:
1 What is the maximum borrowing limit for Category-I and Category-II Alternative Investment Funds (AIFs) as per the new SEBI guidelines?
- A) 10% of their investable funds
- B) 12% of their investable funds
- C) 15% of their investable funds
- D) 20% of their investable funds
