Investment Manager of AIF can provide investment services to offshore funds
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- By Chetan Kulasri
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- Last Updated on 15 June, 2022
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SEBI Informal Guidelines SEBI IMD/ DoF-6/OW/ 2022/9534, Dated: 07.03.2022
A manager of the SEBI registered AIF ‘Ace Lansdowne India Investment Fund’, sought an interpretative letter under the SEBI (Informal Guidance) Scheme, 2003 on the issue that in case applicant who is already acting as the Investment Manager of the SEBI registered AIF can provide investment management services to the offshore fund. SEBI clarified AIF can provide investment management services to the offshore fund only by obtaining the certificate of registration as a portfolio manager. Informal Guideline was sought on the following: –
Q1. Whether the Applicant who is already acting as the Investment Manager of the SEBI registered Alternative Investment Fund can provide investment management services to the offshore fund and Whether the Applicant is required to obtain registration as a Portfolio Manager under the SEBI (Portfolio Managers) Regulations, 2020, in order to provide investment management services to the offshore fund?
The SEBI clarified that an Investment Manager of SEBI registered AIF can provide investment management services to the offshore fund (i.e. an eligible investment fund as defined under section 9A (3) of the IT Act) in Ireland only by obtaining the certificate of registration as a portfolio manager under the PMS Regulations to act as an eligible fund manager.
Q2. Whether the Investment Manager of an AIF is exempted from obtaining registration under SEBI (Portfolio Managers) Regulations, 2020, to provide investment management services to the offshore fund as its activities are regulated under the SEBI (AIF Regulations), 2012?
The SEBI answered that the Manager of a SEBI registered AIF is not exempted from obtaining registration under the PMS Regulations to provide investment management services to the offshore fund in Ireland. Unlike the SEBI (Investment Advisors) Regulations, 2013, the PMS Regulations do not provide for any specific exemptions from registration to any entity and therefore the applicant will have to adhere by the provisions of the PMS Regulations.
Q3. Whether Investment Manager of AIF would be considered as a regulated entity in terms of the SEBI (AIF Regulations), 2012?
The SEBI replied that the Manager of an AIF is considered as a regulated entity in terms of the AIF Regulations.
Further, the SEBI clarified regarding eligibility criteria,
“For the purpose of the grant of certificate to an applicant, the Board shall consider the following conditions for eligibility, namely,—(t) the applicant, Sponsor, and Manager are fit and proper persons based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; (h) the Manager or Sponsor has the necessary infrastructure and manpower to effectively discharge its activities;”
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