Specific due diligence of investors and investments of AIFs
SEBI has issued a circular, SEBI/HO/AFD/AFD-POD-1/P/CIR/2024/135, dated October 8, 2024, regarding specific due diligence requirements for Alternative Investment Funds (AIFs) and their investments. This circular aims to prevent the circumvention of laws, particularly those related to Qualified Institutional Buyers (QIBs), Qualified Buyers (QBs), RBI-regulated lenders, and investments from countries sharing land borders with India. Key Requirements: - Due Diligence for QIBs and QBs: AIFs must conduct due diligence on investors contributing 50% or more to the scheme's corpus to prevent ineligible investors from availing QIB or QB benefits. - RBI-Regulated Lenders: AIFs with RBI-regulated lenders or investors must ensure compliance with RBI norms on income recognition, asset classification, provisioning, and restructuring of stressed assets. - Investments from Border Countries: AIFs with investors from countries sharing land borders with India must conduct due diligence and report i...