For regulatory authorities, the new rules to collect information on final investors in a fund are aimed at curbing round-tripping and money laundering transactions as well as violations of foreign holding restrictions in listed companies.
Under the current rules, a Foreign Portfolio Investor(FPI) who is based out of overseas jurisdictions like Singapore, can shift base to IFSC and avail various tax sops available to the investors based out of IFSC.
Sebi allows AIFs and VC funds to invest up to $1.5 billion in foreign companies
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This is the second relaxation for Alternative Investment Funds (AIFs) by the capital markets regulator in the past three years. In 2018, it raised the overseas investment limit to $750 million from $500 million.
“This will allow greater Indian participation in global companies and will accelerate the growth of the Indian AIF industry,” said 3one4 Capital founder Siddarth Pai.
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MUMBAI: Securities and Exchange Board of India has allowed more room for domestic private equity and venture capital funds to invest abroad. Now, these investment vehicles can invest up to $1.5 billion of their corpus in foreign companies from the existing $750 million. The move will allow these funds more opportunities to invest their growing investment corpuses.