RBI specifies Category II and Category III AIFs as ‘Qualified Buyers’

Jul 06, 2018 | by Avantis RegTech Legal Research Team


Pursuant to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Reserve Bank of India (RBI) has specified that Category II and Category III Alternative Investment Funds (AIFs) - registered with Securities and Exchange Board of India under Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, as ‘qualified buyers’, subject to the following conditions:

a.       The AIF which has invested in an Asset Reconstruction Company (ARC) shall not invest in the security receipts issued by that ARC;

b.      The AIF shall not invest in the security receipts issued on the underlying loans of any of its associate or group company;

c.       The AIF shall not invest in the security receipts backed by non-performing assets of banks which hold equity of more than 10% in that AIF.

[Notification DNBR (PD-ARC) No. 07 /ED(SS)-2018 dated May 16, 2018]

URL: http://www.egazette.nic.in/WriteReadData/2018/187058.pdf


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