DEPUTY GENERAL MANAGER
INVESTMENT MANAGEMENT DEPARTMENT DIVISION OF FUNDS-1
IMD/ DoF-1/VC F/NK/OW/19111/1/2018
July 06, 2018
Singular India Opportunities Trust,
Grace Towers, III Floor
70, Millers Road
Bangalore – 560 052
Dear Sirs,
Sub: Request for interpretive letter under the SEBI (Informal Guidance) Scheme, 2003 – by Singular India Opportunities Trust (SIOT)
1. This has reference to your letter dated April 19, 2018 seeking an interpretive letter under the SEBI (Informal Guidance) Scheme, 2003.
2. In the letter under reference, you have inter alia represented as follows:-
a. SIOT is registered with SEBI as a Category III Alternative Investment Fund vide Registration No.lN/AIF3/14-15/0121 dated October 28, 2014.
b. Aarin Capital Partners, a general partnership firm, is the Settlor of the Trust and has appointed Vistra ITCL (India) Limited to act as the trustees of the Trust.
c. The Trustees have appointed Singular Capital India Advisors LLP as the Investment Manager to manage the assets of the Fund, advice the Fund on its investment decisions and administer the investments of the Fund. Aarin Capital Partners is the Sponsor to the schemes of the Fund as required under AIF Regulations.
d. SIOT is the first scheme of the fund and is open-ended scheme. The target corpus of the Scheme is 300 Crores. The scheme follows multiple Investment Cycle approach with each investment cycle having separate Initial Closing, separate Subsequent Closings and separate Commitment Period. The duration of each Investment Cycle is typically eight years and six months (determined based on the Commitment Period of four years and six months and subsequent four-year period). The scheme achieved its first closing on March 14, 2015.
3. In view of the above submissions, you have sought, inter alia, interpretive letter under SEBI (Informal Guidance) Scheme, 2003 from SEBI on the following:
While SIOT is registered as a Category III fund under AIF Regulations, the registration certificate of the Fund does not specify whether SIOT is an open- ended or close-ended fund.
– Please clarify whether such a distinction exist or is relevant.
– If yes, please confirm whether SIOT has been registered as a open-ended fund.
a. Whether it is permissible for a Category III fund to launch both open-ended as well as close-ended schemes. Whether there are specific procedures that needs to be followed to be complied with, prior to launching any scheme.
b. Assuming that SIOT is an open-ended fund, whether existing open-ended scheme of SIOT can be converted into close-ended scheme with the approval from super-majority of investors. Are there any other procedural requirements that needs to be complied?
c. Assuming that SIOT has been registered as an open-ended Category III fund, whether it is permissible to change sub-categorization of SIOT to a close-ended fund. If yes, please share the detailed procedure for the same.
4. Our Comments
The submissions made in your letter have been considered and without necessarily agreeing with your analysis, our views on the issues raised in your letter are as under:
a. On para 3(a): As per Regulation 13 (3) of SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations), Category III Alternative Investment Fund may be open ended or close ended. SIOT is registered as open-ended fund, as sought in the registration application (Form A).
b. On para 3(b): Under AIF Regulations, funds are permitted to launch multiple schemes during its tenure and nature of each scheme is in accordance with category/sub category of the fund. As per Regulation 12 of AIF Regulations, AIF may launch schemes subject to filing of placement memorandum with the Board. Such placement memorandum shall be filed with the Board at least thirty days prior to launch of scheme along with the fees as specified in the second schedule.
Provided that payment of scheme fees shall not apply in case of launch of first scheme by the Alternative Investment Fund. The Board may communicate its comments, if any, to the applicant prior to launch of the scheme and the applicant shall incorporate the comments in the placement memorandum prior to launch of scheme.
c. On para 3(c) & (d): There is no provision in AIF Regulations to convert the existing open ended fund into close ended fund or vice versa.
5. This position is based on the representation made to the Division in your letter under reference. Different facts or conditions might require a different result. This letter does not express decision of the Board on the questions referred.
6. You may note that the above views are expressed only with respect to the clarification sought on SEBI (Alternative Investment Funds) Regulations, 2012 and do not affect the applicability of any law and other SEBI Regulations, guidelines and circulars administered by SEBI or any other authority.
Yours faithfully,
Naveen Sharma
