India Unveils New Hedge, Private Equity Regs.

Apr 4 2012 | 2:26am ET

India's market watchdog has approved a new set of regulations for hedge funds and private equity firms.

The Securities and Exchange Board of India's new scheme requires hedge funds, previously unregulated in the country, to register. It also imposes a range of other requirements, including a 1,000-investor limit, a 10 million rupee (US$194,000) minimum investment requirement and a minimum size of 200 million rupees (US$3.9 million).

The new regulations also bring India's private equity funds under SEBI's ambit for the first time, repealing the 1996 law that governs the asset class.

Under the new system, SEBI recognizes three categories of alternative investment fund. The first includes venture capital funds and infrastructure funds, the second private equity funds, debt funds and funds of funds, and the third hedge funds and other more flexible vehicles.

Category three funds, "considered to have negative externalities, such as exacerbating systemic risk through leverage or complex strategies," will, despite those words, be allowed to employ leverage. SEBI may limit the use of leverage, however. Hedge funds will be permitted as both open-ended and close-ended vehicles, while private equity funds must by close-ended.

P.E. funds are also barred from using leverage and must have a minimum lifespan of three years.

All alternatives funds can list on Indian stock exchanges, with a minimum tradeable lot of 10 million rupees. And all must have at least a 2.5% contribution from the fund sponsor.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

The yield curve and stock market response

Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.