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FVCI's should obtain the requisite amount now at the time of the submission of application.
Market regulator Securities and Exchange Board of India (SEBI) has said that it is mandatory for foreign venture capital investors (FVCIs) to get a firm commitment of at least $1 million (Rs 5 crore) from their investors for registration. This step by SEBI would bring the regulations for foreign funds at par with those of domestic funds.
The order stated that "“Each scheme launched or fund set up by a venture capital fund shall have firm commitment from the investors for contribution of the minimum stipulated amount before the start of operations by the venture capital fund.”
The move is expected put restrictions on shell venture capital companies which are used by promoters of various companies to undertake transactions.
FVCI, a term used for foreign private equity and venture capital investors, should obtain the requisite amount now at the time of the submission of application.
Last month SEBI cut the fees for FVCI's in order to attract investment. The application and registration fees for FCVI has beencut by half to $2,500 and $10,000, respectively.
