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    Introduction of Special Situation Funds As A Sub-Category Under Category I AIFs - Taxguru - in

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    Shekhar Panse
    The Securities and Exchange Board of India (SEBI) introduced Special Situation Funds (SSF) as a new sub-category of Category I Alternative Investment Funds (AIFs) that will invest in "special situation assets". SSFs must have a minimum corpus of 100 crore rupees and accept investments of at least 10 crore rupees. They must comply with eligibility requirements for acting as resolution applicants under India's bankruptcy code and follow certain rules for acquiring stressed loans from the Reserve Bank of India. This aims to protect investors and promote the development of the securities market in India.

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    Introduction of Special Situation Funds As A Sub-Category Under Category I AIFs - Taxguru - in

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    Shekhar Panse
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    The Securities and Exchange Board of India (SEBI) introduced Special Situation Funds (SSF) as a new sub-category of Category I Alternative Investment Funds (AIFs) that will invest in "special situation assets". SSFs must have a minimum corpus of 100 crore rupees and accept investments of at least 10 crore rupees. They must comply with eligibility requirements for acting as resolution applicants under India's bankruptcy code and follow certain rules for acquiring stressed loans from the Reserve Bank of India. This aims to protect investors and promote the development of the securities market in India.

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    Introduction of Special Situation Funds as a sub-category under Category I AIFs- taxguru.in

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    The Securities and Exchange Board of India (SEBI) introduced Special Situation Funds (SSF) as a new sub-category of Category I Alternative Investment Funds (AIFs) that will invest in "special situation assets". SSFs must have a minimum corpus of 100 crore rupees and accept investments of at least 10 crore rupees. They must comply with eligibility requirements for acting as resolution applicants under India's bankruptcy code and follow certain rules for acquiring stressed loans from the Reserve Bank of India. This aims to protect investors and promote the development of the securities market in India.

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    © All Rights Reserved
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    Download as pdf or txt
    18 views2 pages

    Introduction of Special Situation Funds As A Sub-Category Under Category I AIFs - Taxguru - in

    Uploaded by

    Shekhar Panse
    The Securities and Exchange Board of India (SEBI) introduced Special Situation Funds (SSF) as a new sub-category of Category I Alternative Investment Funds (AIFs) that will invest in "special situation assets". SSFs must have a minimum corpus of 100 crore rupees and accept investments of at least 10 crore rupees. They must comply with eligibility requirements for acting as resolution applicants under India's bankruptcy code and follow certain rules for acquiring stressed loans from the Reserve Bank of India. This aims to protect investors and promote the development of the securities market in India.

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    of 2

    INTRODUCTION OF SPECIAL SITUATION

    FUNDS AS A SUB-CATEGORY UNDER


    CATEGORY I AIFS
    https://taxguru.in/sebi/introduction-special-situation-funds-sub-category-category-aifs.html

    Securities and Exchange Board of India

    CIRCULAR

    SEBI/HO/IMD-I/DF6/P/CIR/2022/009

    January 27, 2022

    To,

    All Alternative Investment Funds (AIFs)

    Sir/Madam,

    Sub: Introduction of Special Situation Funds as a sub-category under Category I AIFs

    1. SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), have been amended and
    notified on January 24, 2022, to introduce Special Situation Funds (SSF), a sub-category under Category I AIF,
    which shall invest in ‘special situation assets’. Copy of the notification is available at link.

    2. In this context, the following is specified:

    (a) Each scheme of SSF shall have a corpus of at least one hundred crore rupees.

    (b) SSF shall accept an investment of value not less than ten crore rupees from an investor. In case of an
    accredited investor, the SSF shall accept an investment of value not less than five crore rupees. Further, in
    case of investors who are employees or directors of the SSF or employees or directors of the manager of
    the SSF, the minimum value of investment shall be twenty-five lakh rupees.

    (c) SSF intending to act as a resolution applicant under the Insolvency and Bankruptcy Code, 2016 shall
    ensure compliance with the eligibility requirement provided thereunder.

    3. Further, in respect of SSF acquiring stressed loan in terms of Clause 58 of the Master Direction – Reserve
    Bank of India (Transfer of Loan Exposures) Directions, 2021 (‘RBI Master Direction’), the following is
    specified:
    (a) SSF may acquire stressed loan in terms of clause 58 of RBI Master Direction upon inclusion of SSF in
    the respective Annex of the RBI Master Direction.

    (b) Stressed loan acquired by SSF in terms of clause 58 of the RBI Master Direction shall be subject to a
    minimum lock-in period of six months. The lock in period shall not be applicable in case of recovery of
    the stressed loan from the borrower.

    (c) SSF acquiring stressed loans in terms of the RBI Master Direction shall comply with the same initial
    and continuous due diligence requirements for its investors, as those mandated by Reserve Bank of India
    for investors in Asset Reconstruction Companies.

    4. This circular shall come into force with immediate effect.

    5. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange
    Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of,
    and to regulate the securities market.

    6. The circular is available on SEBI website at www.sebi.gov.in under the categories “Legal framework –
    Circulars” and “Info for – Alternative Investment Funds”.

    Yours faithfully,

    Sanjay Singh Bhati


    Deputy General Manager
    Investment Management Department
    Tel no.: +91-22-26449222
    ssbhati@sebi.gov.in

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