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Enhancing the participation of domestic institutional investors such as insurers and pension funds in Category II Alternative Investment Funds (AIFs) would be high on SEBI’s agenda when the board of the securities market regulator meets on Saturday.
All SEBI has to do is to ensure that its fellow regulators, IRDA and PFRDA, issue the requisite clarifications in order to align them with SEBI regulations, thereby enabling insurers and pension funds to invest in Category II AIFs.
IRDA in 2013 and PFRDA in 2016 had issued circulars which enable the insurers and pension funds to allocate funds for investing in AIFs.
This follows the second report submitted by the Alternative Investment Policy Advisory Committee led by Infosys Founder NR Narayana Murthy.
Category II AIFs do not receive any specific incentives or concessions from the government or any other regulator.
‘Cashless’ operationsThe fund does undertake leverage other than to meet day-to-day operational requirements as permitted in these regulations; and include PE funds, debt funds and fund of funds.
These funds are close ended, and have no other investment restrictions. The virtually ‘cashless’ regulator SEBI is also likely to discuss the use of other electronic modes of payment, such as UPI, and wallets, among others, for transacting in securities using mobile/other forms of electronic trading.
Also to be reviewed is the status update on the integration of KYC data of all SEBI-regulated entities with the Central KYC registry (CERSAI).
Leading by example, SEBI is also likely to do a performance review of the SEBI Board consisting of the Chairman, three whole-time members and four part-time members — Shaktikanta Das of Finance Ministry, senior advocate Arun Sathe, NS Vishwanathan of the RBI, and Tapan Ray of the Corporate Affairs Ministry.
EvaluationThe review would be coducted based on the person to be evaluated, the process, feedback to those who are evaluated, action plan, disclosure to stakeholders and fixing frequency, responsibility and periodical review of the entire evaluation process.
Other items include appointment of an investigation officer to look into the potential violation of SEBI’s norms by every entity involved in the Tata-Mistry spat, besides easing the norms regarding municipal bonds.
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