SEBI drops Indian connection clause, allowing AIFs and VCs to go ‘truly’ global

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The Securities and Exchange Board of India (SEBI) issued new guidelines for foreign-investing Alternative Investment Funds (AIFs) and Venture Capital Funds (VCFs).

SEBI has removed the requirement that the investee company have an Indian connection from the most recent guidelines. AIFs are permitted to invest in securities of companies incorporated outside of India. Furthermore, under certain conditions, VCs may invest in offshore venture capital firms. Previously, Indian funds could only invest 25% of their funds in foreign companies with a presence in India, such as a branch office. However, SEBI was only last year considering the definition of “India connection,” while the 25% ceiling remains in place.

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SEBI drops Indian connection clause, allowing AIFs and VCs to go ‘truly’ global

The Securities and Exchange Board of India (SEBI) issued new guidelines for foreign-investing Alternative Investment Funds (AIFs) and Venture Capital Funds (VCFs).

SEBI has removed the requirement that the investee company have an Indian connection from the most recent guidelines. AIFs are permitted to invest in securities of companies incorporated outside of India. Furthermore, under certain conditions, VCs may invest in offshore venture capital firms. Previously, Indian funds could only invest 25% of their funds in foreign companies with a presence in India, such as a branch office. However, SEBI was only last year considering the definition of “India connection,” while the 25% ceiling remains in place.

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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