On May 21, 2021, In consultation with the Reserve Bank of India(RBI), Securities and Exchange Board of India (SEBI) doubled the overall limit of the investment in overseas markets by alternative investment funds(AIFs), and Venture Capital Funds(VCFs) registered under SEBI (VCFs) Regulations, 1996, from $750 million to $1,500 million (~Rs10,000 crore).
In 2015, the SEBI had allowed the overseas investment by AIFs and VCFs to the extent of $500 million i.e. up to 25 percent of their investable corpus and later it was increased to $750 million in 2018.
i.The current increase in the limit will increase the Indian’s participation in global companies and accelerate the growth of the Indian AIF industry.
ii.The AIF industry has averaged a compounded annual growth rate(CAGR) of 491% between December 2012 and December 2020, to reach Rs 4.42 trillion.
Other regulations on Overseas Investment(unchanged):
i.AIFs/ VCFs should report the utilization of the overseas limits within 5 working days of such utilization on SEBI’s portal.
ii.If an AIF / VCF has not utilized the granted overseas limit within a period of 6 months from the date of SEBI approval (validity period) then that should be reported within 2 working days after expiry of the validity period.
iii.If an AIF/ VCF wishes to surrender the overseas limit at any point of time within the validity period, then that should be reported within 2 working days from the date of the decision to surrender the limit.
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About Securities and Exchange Board of India (SEBI):
Establishment – On April 12, 1992, in accordance with the SEBI Act, 1992.
Headquarters – Mumbai, Maharashtra
Chairman – Ajay Tyagi