INDIA Law and Practice Contributed by: Tejesh Chitlangi, Sushreet Pattanayak, Pooja Mehta and Anita Jain, IC Universal Legal
the securities. Also, as mentioned, a manager must ensure the separation of assets and lia - bilities, and that the bank accounts and secu - rities accounts of each scheme floated under the AIF are segregated and ring-fenced. GIFT Funds There are no concentration norms applicable as such, although other conditions apply for investments that can be made by Venture Capi - tal Schemes and Restricted Schemes. However, these are not as comprehensive as those appli - cable to Domestic AIFs. Retail Schemes also have certain investment restrictions which are not as stringent as those applicable to mutual funds. An overview of the various categories of GIFT Funds are as follows: • Venture Capital Schemes: the minimum investment amount for each investor must be above USD250,000, and there can be no more than 50 investors. The minimum corpus raised must be USD5 million and the maxi - mum can go up to USD200 million. • Restricted Schemes (Category I, II and III AIFs): the investment commitment must be more than USD150,000, and there can be a maximum of 1,000 investors. The minimum corpus to be raised is USD5 million. • Retail Schemes and Closed-Ended Retail Schemes: a minimum commitment of USD10,000 from each investor if the scheme is investing 15% or more in unlisted securi - ties. There is no minimum for open-ended schemes or closed-ended schemes invest - ing less than 15% in unlisted securities. They need to have at least 20 investors with no single investor holding more than 25% of the
scheme. They must raise a minimum corpus of USD5 million. • Accredited Investors : these are exempt from any minimum investment requirements for Venture Capital Schemes and Restricted Schemes. 2.3.2 Requirements for Non-Local Service Providers Domestic AIFs Service providers for Domestic AIFs primarily include custodians, merchant bankers, issue registrars and/or share transfer agents (to be appointed for the collection of stamp duty upon issuance and transfer of AIF units). These service providers must be registered with the SEBI and must have a presence in India. Certain local ser - vices providers, including trustees and bench - marking agencies, may not require SEBI regis - tration to provide services to Domestic AIFs. GIFT Funds Custodians, distributors and depository par - ticipants offering services at GIFT City may be required to secure registration under the Interna - tional Financial Services Centres Authority (Cap - ital Market Intermediaries) Regulations, 2021 (“CMI Regulations”). Other service providers at GIFT City may also require registration with the IFSCA. 2.3.3 Local Regulatory Requirements for Non- The manager entity of a Domestic AIF must be incorporated in India under the country’s appli - cable laws. Foreign investment in the manager of a Domestic AIF may be made via the automatic route in accordance with NDI Rules. If ownership and control of both the manager and sponsor of a Domestic AIF does not lie with Local Managers Domestic AIFs
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