SEBI to revamp rules for hedge, PE funds soon

The Securities and Exchange Board of India said on Tuesday it hopes to finalise regulations for alternative investment funds (AIFs) in the next two months.

SEBI chairman U K Sinha also said the market regulator is going for an overhaul of the initial public offering (IPO) process. Once the new system is in place, bankers to IPOs will have to respond to its queries within a stipulated period.

SEBI had put up a concept paper for regulation of AIFs on its website in August. These have been categorised in nine categories, including private equity funds and hedge funds.

Any fund operating as a hedge fund shall be required to be registered as a 'strategy fund' under the new AIF regulations.

The minimum size of the AIF shall be Rs20 crore, with a minimum investment of Rs1 crore, or 0.1 per cent of the fund size, whichever is higher, according to the concept paper.

Speaking at the Capital Market Summit organised by the Confederation of Indian Industry in New Delhi, Sinha also highlighted SEBI's discomfort with the compliance standards of many listed companies. He said the market regulator's surveillance systems had been picking up a lot of alerts on possible violations and warned companies to get their risk management processes in place before SEBI took action.