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Participation of AIFs in Credit Default Swaps - SEBI - SEBI/HO/AFD/PoD/CIR/2023/15

Extract

..... a), 18(ab) and 20(11) of AIF Regulations enable AIFs to participate in CDS in terms of the conditions as may be specified by SEBI from time to time. In this regard, the following is specified: A. Conditions applicable to Category I, II and III AIFs for buying CDS: 2.1. Category I AIFs and Category II AIFs may buy CDS on underlying investment in debt securities, only for the purpose of hedging. 2.2. Category III AIFs may buy CDS for the purpose of hedging or otherwise, within permissible leverage .....

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Participation of AIFs in Credit Default Swaps - SEBI

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..... he custodian, by the next working day, in the manner as specified by the custodian. 2.7. Custodian, shall put in place a mechanism to collect necessary details from AIFs transacting in CDS, to monitor the compliance with conditions specified at para 2A and para 2B above. 2.8. The obligation of manager/AIF and custodian in case of breach of leverage limits due to transactions in CDS by Category III AIFs, shall be as specified in para 3.4 of SEBI circular no. CIR/IMD/DF/10/2013 dated July 29, 2013 .....

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Participation of AIFs in Credit Default Swaps - SEBI

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..... nd 17(c) of the AIF Regulations, Category I and II AIFs shall not borrow funds directly or indirectly and engage in leverage except for meeting temporary funding requirements for not more than thirty days, not more than four occasions in a year and not more than ten percent of the investable funds. In this regard, Category I and Category II AIFs which transact in CDS, shall maintain thirty days cooling off period between the two periods of borrowing or engaging in leverage. 2.12. All CDS transac .....

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Participation of AIFs in Credit Default Swaps - SEBI

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