Market regulator SEBI Tuesday asked fund houses to implement the new rules for Infrastructure Debt Funds (IDF).
Mumbai: Market regulator SEBI Tuesday asked fund houses to implement the new rules for Infrastructure Debt Funds (IDF).
The new norms for IDFs, including permitting private placement to less than 50 investors has been permitted as an alternative to New Fund Offer to the public, were notified by Securities and Exchange of India (SEBI) on April 17.
IDFs, which can be set up like mutual funds, can invest funds collected for their schemes in bonds of public financial institutions and infrastructure finance companies.
According to a circular, SEBI said that private placement to less than 50 investors has been permitted as an alternative to New Fund Offer to the public in the case of IDFs.
Meanwhile for private placement, mutual funds have to file a Placement Memorandum with SEBI instead of a Scheme Information Document and a Key Information Memorandum.
"... All the other conditions applicable to IDFs offered through the NFO route like kind of investments, investment restrictions, etc would be applicable to IDFs offered through private placement," the circular said.
The Asset Management Companies should ensure that the Placement Memorandum is uploaded on their respective websites after allotment of units. It has also to be put up on the website of the recognised stock exchange, where it is proposed to be listed, at the time of listing of the scheme.
Further, the strategic investors in the IDF has been expanded to include FIIs registered with SEBI which are long term investors subject to their existing investment limits.
The categories of FIIs designated as long term investors only for the purpose of IDF include foreign central banks, governmental agencies, sovereign wealth funds, international organisations, insurance funds and pension funds.
As per SEBI, IDFs can now extend the tenure of their schemes by up to two years with the consent of two-third investors.
An IDF scheme would be allowed to invest up to 30 percent of its Assets Under Management (AUM) in assets from the current ceiling of 20 percent. The new investment limit is subject to the condition that the sponsor/associate retains at least 30 percent of the assets sold to the IDF till the assets are held in the IDF portfolio.