TaxTMI 
TaxTMI 
Corporate Debt Market Development Fund - Net set of regulations in respect of Alternative Investment Fund set up and making investments, notified - Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023
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....lations, 2023. 2. They shall come into force on the date of their publication in the Official Gazette: Provided that the amendments in Regulation 23 shall come into force with effect from November 1, 2023: Provided further that the amendments in Regulation 4 shall come into force on such date as the Board may by notification in the Official Gazette appoint. 3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, - I. In regulation 2, in sub-regulation (1), i) after clause (g), the following new clause shall be inserted, namely, - "(ga) "Corporate Debt Market Development Fund" means an Alternative Investment Fund set up and making investments in terms of Chapter III-C of these regulations." ii) after clause (pa), the following new clauses shall be inserted, namely, - "(pb) "liquidation period" means a period of one year following the expiry of tenure or extended tenure of the scheme for fully liquidating the scheme of an Alternative Investment Fund. (pc) "Liquidation scheme" means a close ended scheme launched by an Alternative Investment Fund ....
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....Investment Fund: Provided that while obtaining approval of the investors, the investor specified under sub-clause (c) who has committed to invest at least fifty percent of the corpus of the scheme of Alternative Investment Fund and is buying or selling the investment, from or to, the Alternative Investment Fund, shall be excluded from the voting process." VII. After Chapter III-B, the following new chapter shall be inserted, namely, - " CHAPTER III-C CORPORATE DEBT MARKET DEVELOPMENT FUND Applicability. 19N. (1) The provisions of this Chapter shall apply only to the Corporate Debt Market Development Fund. (2) All other provisions of these regulations, except the following provisions and the guidelines and circulars issued under these regulations, unless the context otherwise requires or is repugnant to the provisions of this Chapter, shall apply to the Corporate Debt Market Development Fund, its sponsor, manager, trustee and investors: i. sub regulation (2) of regulation 9; ii. clauses (a), (c), (d), and (f) of regulation 10; iii. sub regulations (2) and (3) ....
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....stment in the fund but such continuing interest shall not be through the waiver of management fees. Investment conditions for the Corporate Debt Market Development Fund. 19Q. (1) During periods of market dislocation, the Corporate Debt Market Development Fund shall purchase corporate debt securities from the specified debt-oriented schemes of mutual funds which meet the following eligibility criteria: (a) corporate debt securities shall be listed and have an investment grade rating; (b) the residual maturity of such securities shall not exceed five years on the date of purchase; (c) securities where there is no material possibility of default or adverse credit news or views. Explanation: For the purpose of sub regulation (1) of this regulation, the Board shall decide the trigger of market dislocation and its reversal based on the parameters as may be specified by the Board. (2) The Corporate Debt Market Development Fund shall purchase corporate debt securities in proportion to the contribution made in it at a mutual fund level and in accordance with detailed guidelines as may be approv....
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.... (11) In-specie distribution of assets of the Corporate Debt Market Development Fund may be made to the unit holders, only at the time of winding up subject to the consent of seventy-five percent of the unit holders by value of their investment in such fund. (12) Any material alteration to the investment strategy of the Corporate Debt Market Development Fund shall be with the prior approval of the Board. Disclosures. 19R. (1) The portfolio of the Corporate Debt Market Development Fund shall be disclosed to the unitholders on a fortnightly basis. (2) The Net Asset Value of the Corporate Debt Market Development Fund shall be disclosed to the unitholders on a daily basis. Governance Mechanism for the Corporate Debt Market Development Fund. 19S. (1) The Corporate Debt Market Development Fund shall appoint a trustee company. (2) The Board of directors of trustee company and the Manager of the Corporate Debt Market Development Fund shall be appointed with the prior approval of the Board. (3) The roles and responsibilities of the trustee company shall be similar to the roles and ....
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....ding up of the Corporate Debt Market Development Fund. (2) Notwithstanding anything contained in sub-regulation (1) of this regulation, the Manager of Corporate Debt Market Development Fund shall continue to be responsible for any liabilities, that may arise out of the mandate in relation to its investment management activities." VIII. In regulation 20, after sub-regulation (16), the following new sub-regulations shall be inserted, namely, - "(17) The Manager shall appoint a Compliance Officer who shall be responsible for monitoring compliance with the provisions of the Act, rules, regulations, notifications, circulars, guidelines, instructions or any other directives issued by the Board. (18) The Compliance Officer shall satisfy the eligibility criteria as may be specified by the Board from time to time. (19) The Compliance Officer shall immediately and independently report to the Board any noncompliance observed by him, as soon as possible but not later than seven working days from the date of observing such non-compliance." IX. In regulation 23, i) in sub-regulation (1), a....
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....native Investment Fund" shall be substituted with "in specie distribution of assets of the scheme of the Alternative Investment Fund"; b) the words "including on winding up of the Alternative Investment Fund" shall be substituted with "including on winding up of the scheme of the Alternative Investment Fund"; and c) the words "after obtaining approval of at least seventy five percent of the investors by value of their investment in the Alternative Investment Fund" shall be substituted with "subject to conditions as may be specified by the Board from time to time". iii) after sub-regulation (8), the following new sub-regulation (9) shall be inserted, namely, - " (9) Notwithstanding anything contained in sub-regulation (7), during liquidation period of a scheme, an Alternative Investment Fund may distribute investments of a scheme which are not sold due to lack of liquidity, in-specie to the investors or sell such investments to a liquidation scheme, after obtaining approval of at least seventy five percent of the investors by value of their investment in the scheme of the Alternative Investmen....
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....ided under Regulation 19 of these regulations: Corporate Debt Market Development Fund" shall be inserted. XIII. In the Second Schedule, in Part A, after the words and symbols "Registration Fee for Angel Funds - Rs.2,00,000", the words and symbols "Registration fee for Corporate Debt Market Development Fund (specified Alternative Investment Fund as provided under Regulation 19 of these regulations): Rs.5,00,000" shall be inserted. BABITHA RAYUDU, Executive Director [ADVT.-III/4/Exty./194/2023-24] 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, - (a) 16th September, 2013 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/24/6573. (b) 23rd May, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide ....