TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2021
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.... (Alternative Investment Funds) Regulations, 2012- I In sub-regulation (1) of regulation 2, i. after clause (w) and before clause (x), the following clause shall be inserted, namely, - "(wa) "startup" means a private limited company or a limited liability partnership which fulfills the criteria for startup as specified by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, vide notification No. G.S.R. 127(E) dated February 19, 2019 or such other policy of the Central Government issued in this regard from time to time;" ii. clause (aa) shall be substituted with the following, namely, - "(aa) "venture capital undertaking" means a domestic company which is not listed on a recognised stock exchange at the time of making investments;" II In sub-regulation (2) of regulation 11, after the words and symbol "key service providers," and before the words "conflict of interest", the words and symbol "terms of reference of the committee constituted for approving the decisions of the Alternative Investment Fund," shall be inserted. III In sub-regulation (1) of regulation....
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....egulation 18, i. clause (a) shall be substituted with the following clause, namely, - "(a) Category III Alternative Investment Funds may invest in securities of listed or unlisted investee companies, derivatives, units of other Alternative Investment Funds or complex or structured products;" ii. clause (b) shall be omitted. VII sub-regulation (1) of regulation 19F, i. the words "venture capital undertakings" shall be substituted with the word "startups". ii. clauses (a) and (b) shall be omitted. VIII Regulation 20 shall be substituted with the following, namely, - "20 (1) Alternative Investment Fund, key management personnel of the Alternative Investment Fund, trustee, trustee company, directors of the trustee company, designated partners or directors of the Alternative Investment Fund, as the case may be, managers and key management personnel of managers shall abide by the Code of Conduct as specified in the Fourth Schedule. Explanation.- For the purpose of this sub-regulation, 'key management personnel' shall have the meaning as specified by the Board from time to time. (2) The Manager and e....
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....or directors of the Alternative Investment Fund or employees or directors of the Manager, has committed to invest not less than seventy crore rupees (or an equivalent amount in currency other than Indian rupees) and has furnished a waiver to the Alternative Investment Fund in respect of compliance with the said sub-regulation, in the manner as may be specified by the Board. (9) The members of the Investment Committee shall abide by the Code of Conduct applicable to them as specified in Fourth Schedule. (10) The external members of the Investment Committee whose names are not disclosed in the placement memorandum or in the agreement made with the investor or any other fund document at the time of on-boarding investors shall be appointed to the Investment Committee only with the consent of at least seventy five percent of the investors by the value of their investment in the Alternative Investment Fund or scheme. (11) The Sponsor or Manager of the Alternative Investment Fund shall appoint a custodian registered with the Board for safekeeping of the securities if the corpus of the Alternative Investment Fund is more than five hundred crore rupees: P....
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....) Code of Conduct for the Managers of Alternative Investment Funds and key management personnel of Managers and Alternative Investment Funds Every Manager of Alternative Investment Funds and key management personnel of the manager and Alternative Investment Funds shall: (a) abide by the Act, Rules, Regulations, Guidelines and Circulars as applicable to Alternative Investment Funds at all times; (b) maintain integrity, highest ethical and professional standards in all its dealings; (c) ensure proper care and exercise due diligence and independent professional judgment in all its decisions; (d) act in a fiduciary capacity towards investors of the Alternative Investment Fund and ensure that decisions are taken in the interest of the investors; (e) abide by the policies of the Alternative Investment Fund to identify, monitor and appropriately mitigate any potential conflict of interest throughout the scope of its business; (f) not make any misleading or inaccurate statement, whether oral or written, either about their qualifications or capability to render investment management services or their achievements; (g) r....
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....erest and wherever necessary, recuse themselves from the decision making process; (d) maintain confidentiality of information received regarding the Alternative Investment Fund, its investors and investee companies; unless explicit confirmation is received that such information is not subject to any non-disclosure agreement. (e) not indulge in any unethical practice or professional misconduct or any act, whether by omission or commission, which tantamount to gross negligence or fraud. AJAY TYAGI, Chairman [ADVT.-III/4/Exty./54/2021-22] Footnote: 1. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were published in the Gazette of India on May 21, 2012 vide No. SEBI/LAD-NRO/GN/2012-13/04/11262. 2. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were subsequently amended on, - (1) 16th September, 2013 by Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/24/6573. (2) 23rd May, 2014 by Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vid....