Registration of Venture Capital/Angel Fund under AIF Regulations

SEBI (Alternative Investment Funds) Regulations, 2012 

Definition according to SEBI―Alternative Investment Fund, AIF Regulations 2012, implies any reserve built up or consolidated in India as a trust or an organization or a constrained obligation association or a body corporate which, is a secretly pooled speculation vehicle which gathers stores from financial specialists, regardless of whether Indian or outside, for putting it as per a characterized venture approach for the advantage of its speculators; and (ii) isn't secured under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 or some other directions of the Board to control finance administration exercises: 

Given that the accompanying should not be considered as Alternative Investment Fund with the end goal of these controls – 

family trusts set up for the advantage of ̳relatives' as characterized under Companies Act, 1956; 

ESOP Trusts set up under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999 or as allowed under Companies Act, 1956; 

worker welfare trusts or tip trusts set up for the advantage of representatives; 

holding organizations' inside the importance of Section 4 of the Companies Act, 1956; 

other uncommon reason vehicles not set up by support administrators, including securitization puts stock in, managed under a particular administrative system; 

stores oversaw by securitization organization or reproduction organization which is enlisted with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and 

any such pool of assets which is specifically controlled by some other controller in India; 

Enlistment Compulsory after beginning of the Act: 

Inside the time of a half year from the beginning of the Act all the current reserve flopping inside this definition required to get apply for the enlistment of the same. This period can be reached out for the further period up to a most extreme of a year from the date of beginning of the demonstration gave that current plans will be permitted to finish their concurred residency, such subsidizes might not raise any new monies other than duties effectively made till enlistment is allowed. 

Exclusion to the Investment firms: 

Existing assets, which don't propose to acknowledge any new duties after beginning of these directions might not be required to get enrollment under these controls subject to accommodation of data on their exercises to the Board in the way as might be indicated. 

In the event that such existing assets are not ready to follow conditions determined, they may apply for exclusion to the SEBI from strict consistence with these directions and the SEBI upon examination may give such exceptions or issue such guidelines as might be regarded suitable. 

Investment Fund (VC) enlisted with SEBI Act should keep on being directed by the said control till the current reserve twisted up and not dispatch any new plan after warning. The current store won't build target corpus of the reserve or Scheme. The VC may look for re-enrollment subject to the endorsement of 2/3 of the financial specialist's estimation of their speculations. 

No element or individual will go about as an Alternative Investment Fund unless it has acquired a testament of enlistment from the Board, any individual or substance neglects to make application 

for give of a declaration inside the period indicated in that should stop to bear on any movement as an Alternative Investment Fund. 

Classifications UNDER AIF 

The individual or substance can look for enlistment under after classes: 

A. Class I Alternative Investment Fund, which puts resources into start-up or beginning period wanders or socialventures or SMEs or framework or different segments or ranges which the legislature or controllers consider as socially or monetarily alluring and might incorporate investment reserves, SME Funds, social wander stores, foundation reserves and such other Alternative Investment Funds as might be determined; 

Clarification 

─ For the motivation behind this provision, Alternative Investment Funds which are for the most part seen to have positive overflow impacts on economy and for which the Board or Government of India or different controllers in India should seriously think about giving motivators or concessions might be includedand such subsidizes which are shaped as trusts or organizations might be understood as ―venture capital organization or ―venture capital store as indicated under sub-area (23FB) of Section 10 of the Income Tax Act, 1961 

B. Class II Alternative Investment Fund‖ which does not fall in Category I and III and which does not attempt use or obtaining other than to meet everyday operational prerequisites and as allowed in these controls 

Clarification 

─ For the motivation behind this statement, Alternative Investment Funds, for example, private value assets or obligation reserves for which no particular impetuses or concessions are given by the legislature or some other Regulator might be incorporated. 

C. Classification III Alternative Investment Fund‖ which utilizes assorted or complex exchanging methodologies and may utilize use incorporating through interest in recorded or unlisted subsidiaries. 

Clarification 

─ For the motivation behind this statement, Alternative Investment Funds, for example, flexible investments or assets which exchange with a view to make here and now returns or such different assets which are open-finished and for which no particular motivators or concessions are given by the administration or some other Regulator should be incorporated. 

Step by step instructions to get enlisted as an Alternative Investment Fund 

The Applicant for concede of enlistment as an Alternative Investment Fund under SEBI (Alternative Investment Funds) Regulations, 2012 should make an application to SEBI in Form An as gave in the Regulations alongside all the important reports. 

By and large on receipt of Application, the candidate will get an answer from SEBI inside 21 working days. The time taken for enlistment nonetheless, relies upon how quick the prerequisites are followed by the candidate. 

The candidate is encouraged to experience the SEBI (Alternative Investment Funds) Regulations, 2012 for checking the qualification criteria and such different points of interest which may help speed up the enrollment procedure. 

The candidate must specify in the covering letter in the matter of whether: 

It is enlisted with SEBI as a Venture Capital Fund. On the off chance that yes, give points of interest. 

It has been embraced the exercises of an AIF before such application.If yes, give points of interest. 

It is applying for enrollment of another store. 

As an indispensable piece of the enrollment procedure, the candidate will present the accompanying 

Shape A fittingly filled, numbered, properly marked and stamped. 

Application expenses of Rs.1,00,000/ - by method for bank draft for "The Securities and Exchange Board of India", payable at Mumbai. 

The candidate might likewise make an online application as far as the rules as recommended by SEBI now and again. 

Allow of Certificate of Registration 

SEBI might consider necessities as determined in the Regulations to consider concede of enrollment. In the event that fulfilled that the candidate satisfies the necessities as indicated in the Regulations, SEBI should favor the application and advise the candidate of the same. 

On receipt of endorsement from SEBI, the candidate must pay enrollment charge of Rs.5,00,000/ - (If candidate isn't enlisted with SEBI as a Venture Capital Fund)/Re-enrollment expenses (If candidate is enrolled with SEBI as a Venture Capital Fund) of Rs. 1,00,000/ - to SEBI by method for bank draft for "The Securities and Exchange Board of India", payable at Mumbai. 

On receipt of enrollment/re-enlistment expenses, SEBI will give the candidate the testament of enlistment as an Alternative Investment Fund. 

Post-Registration consistence 

Once enrolled, the AIF must conform to the detailing prerequisites as determined by SEBI every once in a while. 

The AIF should consistently check the SEBI site for any updation/fliers/rules issued from SEBI every once in a while concerning the AIF action. 

The AIF must personal to SEBI any material change in the subtle elements effectively outfitted to SEBI inside a sensible timeframe. 

Post-Registration consistence 

"The candidate" implies the element looking for enlistment as an Alternative Investment Fund 

Application which is fragmented or without the important reports/data/revelations would not be acknowledged and would be dealt with as not recorded. In any case, implication to this impact will be given to the candidate inside a sensible timeframe. 

Applications including arrangement choices or different contemplations may get deferred in preparing and in getting enrollment endorsements. 

Records/annexure submitted alongside the application should be numbered and properly marked. 

In the event of an Authorized signatory, please present an approval letter from the Directors/Trustees/Designated Partners of the Fund. 

The application in Form An, application charges alongside all the fundamental data as counted above will be routed to 

The Deputy General Manager, 

Division of Funds-1, 

Venture Management Department, Securities and Exchange Board of India (SEBI), SEBIBhavan, 

Plot No. C4-A, "G' Block, 

BandraKurla Complex, Bandra (East), Mumbai – 400051 

Late AMENDMENT IN THE AIF FUND: 

Securities Exchange Board of India ("SEBI") in its Board Meeting on 23rd November 2016 has endorsed the accompanying revisions to the SEBI (Alternative Investment Funds) Regulations, 2012 regarding 'Blessed messenger Funds'. Extensively the proposed changes are as per the following: 

As far as possible for number of heavenly attendant speculators in a plan is expanded from 4