SEBI/HO/IMD/DF6/CIR/P/2021/004 January 08, 2021
To,
All Alternative Investment Funds (AIFs)
Sir/ Madam,
Sub: Amendment to Regulation 20(6) of SEBI (AIF) Regulations, 2012
1. In terms of the amendment to SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), notified on January 08, 2021, exemption is granted from applicability of clause (i) and (ii) of the first proviso to Regulation 20(6), subject to certain conditions including each investor furnishing a waiver to the AIF in respect of compliance with these clauses, in the manner specified by SEBI. The said notification is available here.
2. The format for waiver to be furnished by the investors in this regard, is given at Annexure I.
3. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities market and to promote the development of, and to regulate the securities market.
4. The circular is available on SEBI website at www.sebi.gov.in under the categories “Legal framework – Circulars” and “Info for – Alternative Investment Funds”.
Yours faithfully,
Sanjay Singh Bhati
Deputy General Manager
+91-22-26449222
Annexure 1: Format of waiver to be provided by the investors
To
(Name of Manager), Manager of (Name of AIF/ Scheme)
Sub: Waiver in respect of compliance with clause (i) and (ii) of the first proviso to Regulation 20(6), as per amendment to SEBI (AIF) Regulations, 2012, notified on January 08, 2021.
- We are considering to invest/ have invested in (Name of the AIF/Scheme) managed by (Name of the Manager).
- We understand that (Name of the AIF) is registered with Securities and Exchange Board of India (SEBI) and as such is required to comply with clause (i) and (ii) of the first proviso to Regulation 20(6) of SEBI (AIF) Regulations, 2012, which defines the responsibilities of members of investment committee, constituted by the manager of the AIF to approve investment and divestment decisions.
- We understand that (Name of Manager) has constituted/shall constitute an investment committee (by whatever name it may be called) to approve investment and divestment decisions of (Name of the AIF/Scheme).
- In this regard, we confirm that we have the independent ability and mechanism to carry out due diligence of our investments. Hence, we hereby grant waiver to (name of the AIF) from the requirement of compliance with clause (i) and (ii) of the first proviso to Regulation 20(6) of SEBI (AIF) Regulations, in terms of SEBI circular dated January 08, 2021. Further, by providing this waiver, we understand that the members of Investment Committee are absolved from the responsibility cast on them, under the said clauses.
- Notwithstanding the waiver granted herein, the members of investment committee shall not be absolved from contractual responsibilities, if any, cast on them, in terms of provisions of the fund documents.
- Further, we understand that (Name of Manager), the manager of (name of the AIF/Scheme) shall continue to be responsible for ensuring that the investments of (name of the AIF/Scheme) are in compliance with the provisions of SEBI (AIF) Regulations, the terms of the placement memorandum, agreement with the undersigned, other fund documents and applicable laws.
(Signed by the investor or two authorized signatories of the investor)
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