Move to curb front-running at AMCs leads a slew of SEBI board decisions
The SEBI board on Tuesday approved measures to deter front-running at asset management companies.
This will be through an institutional mechanism that includes enhanced surveillance systems, internal control procedures, and escalation processes to identify, monitor, and address specific types of misconduct spanning front-running, insider-trading, and misuse of sensitive information.
NRI INVESTMENTS IN FPI
SEBI has also allowed increased contributions by non-resident Indians, overseas citizens of India, and resident Indian individuals in the corpus of certain FPIs based out of GIFT IFSC, subject to conditions. At present, NRIs and OCIs can contribute a maximum of 49 per cent in an FPI.
A foreign fund set up at GIFT IFSC can have 100 per cent contribution from NRIs, OCIs, and resident Indians, subject to the FPI submitting copies of investors’ PAN along with their economic interest in the FPI or a declaration along with documents such as passports and OCI cards.
AIF NORMS FOR VCS
Venture capital funds have been allowed to migrate to AIF regulations and get the facilities available for Alternative Investment Funds to deal with unliquidated investments. Migrated VCs can avail themselves of the flexibilities under AIF Regulations on extension of tenure, liquidation period, and dissolution period to deal with unliquidated investments.
Equity passive schemes have been allowed to invest up to 35 per cent of their net asset value in the group companies of the sponsor. The cap is 25 per cent for non-passive schemes.
The SEBI board has exempted fund managers and dealers from the requirement of recording face-toface communication, including out-of-oce interactions, during market hours.
UNITS FOR MANAGERS
The board has allowed investment managers of InvITs/REITs to receive units in lieu of management fees for the purpose of providing unit-based employee benefits.