The Securities and Exchange Board of India (SEBI) has provided a two-month relief to alternative investment funds to meet their regulatory disclosure obligations because of the ongoing coronavirus crisis.
The deadline to make regulatory filings for AIFs for the periods ending March 31 and April 30 will be extended by two months over and above the timelines prescribed under its regulations, SEBI said on Monday.
The extension is applicable to all AIFs, including private equity and venture capital funds, and will come into effect immediately, the capital markets regulator said in a circular.
SEBI’s action is the latest in a series of measures that the regulator has taken over the past week to ease the compliance burden on publicly listed companies, ratings firms and foreign portfolio investors. These steps come in the wake of the coronavirus pandemic that has prompted the government to impose a nationwide lockdown.
SEBI had put into place its AIF regulations in 2012. Most alternative investment funds are now registered under this AIF regime. Before the AIF regime came into place, venture capital funds were governed under the VCF regime.
The AIF regulations divide funds into three categories. Category-I covers venture capital funds while Category-II covers private equity and debt funds. Category-III covers hedge funds and PIPE funds, or which make private investment in public equities.
According to existing SEBI guidelines, Category I and II funds are required to submit reports on a quarterly basis. These reports would have been due on March 31, but these funds now have a window till May 31.
These reports include information such as the available dry powder with the AIFs and the amount of capital raised and invested each month or each quarter.
Category-III funds have to submit monthly reports, according to SEBI guidelines. All AIFs have to submit reports irrespective of whether or not the fund has started activity, SEBI guidelines say.
Further, AIFs are also required to submit a Compliance Test Report to the sponsor or a trustee within 30 days from the end of the financial year. The sponsor—a limited partner in an AIF—has a right to complain to SEBI if there is a violation of these disclosure norms.