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Sebi relaxes compliance requirements for VCs, AIFs amid COVID-19

With an aim to reduce the compliance burden on venture capital funds and alternative investment funds, market regulator Sebi on Monday extended the due date for various regulatory filings till September-end.

The move comes in the wake of the second wave of the COVID-19 pandemic and restrictions imposed by various state governments, Sebi said in a circular.

The decision has been taken after Sebi received representation from the AIF industry, requesting the extension of timelines for various regulatory filings and compliances for venture capital funds (VCFs) and alternative investment funds (AIFs).

After consideration, it has been decided to extend the due dates for regulatory filings by AIFs and VCFs, during the period ending March 2021 to July 2021 as prescribed under Sebi (Alternative Investment Funds) Regulations, it said.

AIFs and VCFs may submit regulatory filings for these periods, as applicable, on or before September 30, 2021, it added.

AIFs are privately-pooled investment funds, which collect funds from investors, whether Indian or foreign, for investing in accordance with a defined investment policy for the benefit of their investors.

Earlier in May 2021, with an aim to boost the listing of startups, SEBI notified a slew of relaxations to norms, including reducing the holding period for pre-issue capital and allowing discretionary allotment to eligible investors.

The changes have been made to the framework for listing on the Innovators Growth Platform (IGP), according to two separate notifications issued on Wednesday.

This comes after the SEBI board approved a proposal in March in this regard.

Other relaxations include easing delisting requirements and relaxation in guidelines for migrating to the mainboard.

This is aimed at making the platform more accessible to companies in view of the evolving start-up ecosystem.

The regulator has reduced the period of holding of 25 percent of pre-issue capital of the issuer company by eligible investors to one year from the current requirement of two years.

The term ‘Accredited Investor’ for the purpose of IGP is renamed as ‘Innovators Growth Platform Investors’.

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