TMI BlogCorporate Debt Market Development Fund - Net set of regulations in respect of Alternative Investment Fund set up and making investments, notified - Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023X X X X Extracts X X X X X X X X Extracts X X X X ..... d Amendment) Regulations, 2023. 2. They shall come into force on the date of their publication in the Official Gazette: Provided that the amendments in Regulation 23 shall come into force with effect from November 1, 2023: Provided further that the amendments in Regulation 4 shall come into force on such date as the Board may by notification in the Official Gazette appoint. 3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 , I. In regulation 2, in sub-regulation (1), i) after clause (g), the following new clause shall be inserted, namely, - (ga) Corporate Debt Market Development Fund means an Alternative Investment Fund set up and making investments in terms of Chapter III-C of these regulations. ii) after clause (pa), the following new clauses shall be inserted, namely, - (pb) liquidation period means a period of one year following the expiry of tenure or extended tenure of the scheme for fully liquidating the scheme of an Alternative Investment Fund. (pc) Liquidation scheme means a close ended scheme launched by an Alternative Investment Fund only for the purpose of liquidating the unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Alternative Investment Fund and is buying or selling the investment, from or to, the Alternative Investment Fund, shall be excluded from the voting process. VII. After Chapter III-B , the following new chapter shall be inserted, namely, - CHAPTER III-C CORPORATE DEBT MARKET DEVELOPMENT FUND Applicability . 19N. (1) The provisions of this Chapter shall apply only to the Corporate Debt Market Development Fund. (2) All other provisions of these regulations, except the following provisions and the guidelines and circulars issued under these regulations, unless the context otherwise requires or is repugnant to the provisions of this Chapter, shall apply to the Corporate Debt Market Development Fund, its sponsor, manager, trustee and investors: i. sub regulation (2) of regulation 9; ii. clauses (a), (c), (d), and (f) of regulation 10; iii. sub regulations (2) and (3) of regulation 12; iv. sub regulations (1), (2), (3), (5) and (6) of regulation 13; v. regulations 14, 16, 17, 18, 19, Chapter III-A and III-B, 23; vi. sub regulation (1) of regulation 15; vii. sub regulation (15) of regulation 20; viii. clause (a), (b) and (c) of sub regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isted and have an investment grade rating; (b) the residual maturity of such securities shall not exceed five years on the date of purchase; (c) securities where there is no material possibility of default or adverse credit news or views. Explanation: For the purpose of sub regulation (1) of this regulation, the Board shall decide the trigger of market dislocation and its reversal based on the parameters as may be specified by the Board. (2) The Corporate Debt Market Development Fund shall purchase corporate debt securities in proportion to the contribution made in it at a mutual fund level and in accordance with detailed guidelines as may be approved by the Board. (3) The Corporate Debt Market Development Fund shall hold eligible securities as mentioned in sub regulation (1) of this regulation, till maturity or sell the same in the secondary market upon reversal of market dislocation, in the manner as specified by the Board from time to time. (4) Other than market dislocation period, the Corporate Debt Market Development Fund shall invest in liquid and low-risk debt instruments and undertake any other activity related to corporate debt market, as may be specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... daily basis. Governance Mechanism for the Corporate Debt Market Development Fund . 19S. (1) The Corporate Debt Market Development Fund shall appoint a trustee company. (2) The Board of directors of trustee company and the Manager of the Corporate Debt Market Development Fund shall be appointed with the prior approval of the Board. (3) The roles and responsibilities of the trustee company shall be similar to the roles and responsibilities assigned to trustees under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. (4) The trustee company of the Corporate Debt Market Development Fund shall not engage in any activity other than acting as a trustee of the Corporate Debt Market Development Fund, except with the prior written consent of the Board: Provided that any other activity of the trustee company as permitted by the Board shall not be in conflict with its role as the trustee of the Corporate Debt Market Development Fund. (5) Two-thirds of the members of the board of directors of the trustee company shall be independent directors and shall not be associated with the Sponsor or the Manager in any manner whatsoever. (6) No person sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noncompliance observed by him, as soon as possible but not later than seven working days from the date of observing such non-compliance. IX. In regulation 23 , i) in sub-regulation (1), after the words The Alternative Investment Fund shall , the words carry out valuation of its investments in the manner specified by the Board from time to time and shall be inserted; ii) in sub-regulation (3), after the words open ended funds , the symbol . shall be replaced with : and the following new proviso shall be inserted, namely, - Provided that for the purpose of calculation of NAV, Category III Alternative Investment Funds shall undertake valuation of their investment in unlisted securities and listed debt securities by an independent valuer. iii) after sub-regulation (3), the following new sub-regulations shall be inserted, namely, - (4) The Manager shall ensure that the Alternative Investment Fund appoints an independent valuer who satisfies the criteria specified by the Board from time to time. (5) The Manager and the key management personnel of the Manager shall ensure that the independent valuer computes and carries out valuation of the investments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns specified by the Board from time to time: Provided that in the absence of consent of unit holders for exercising the options under sub-regulation (9) during liquidation period, such investments of the scheme of the Alternative Investment Fund shall be dealt with in the manner as may be specified by the Board from time to time. iv) the existing sub-regulation (9) shall be renumbered as (10). XI. After regulation 29 and before regulation 30, the following regulation shall be inserted, namely,- Liquidation Scheme. 29A. (1) The Alternative Investment Fund may launch a liquidation scheme subject to filing of placement memorandum with the Board. (2) The requirements under Regulation 10(b), Regulation 10(c), Regulation 12, Regulation 13(1), Regulation 13(2), Regulation 13(4), Regulation 13(5), Regulation 15, Regulation 16, Regulation 17, Regulation 18, Regulation 19L(1), Regulation 19L(2), Regulation 19M, Regulation 29 (7) and Regulation 29 (9) shall not apply to a liquidation scheme of the Alternative Investment Fund. (3) The placement memorandum of liquidation scheme of the Alternative Investment Fund shall be filed with the Board through a merchant banke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 vide No. SEBI/LAD-NRO/GN/2015-16/011. (e) 4th January, 2017 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2016 vide No. SEBI/LAD/NRO/GN/2016-17/026. (f) 6th March, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037. (g) 1st June, 2018 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2018 vide No. SEBI/LAD/NRO/GN/2018/19. (h) 10th May, 2019 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019 vide No. SEBI/LAD/NRO/GN/2019/16. (i) 7th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10. (j) 9th October, 2020 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2020 vide No. SEBI/LAD/NRO/GN/2020/37. (k) 8th January, 2021 by the Securities and Exchange Board of India (Alternat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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