SEBI Holds AIF Investors In Breach Of Insider Trading Norms For Investment Decisions: Resolut Partners' Take

The Legal Library section collates quality and in-depth reports on regulatory developments, court rulings and policy changes authored by India’s top law firms and consultants. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of law and policy..Resolut Partners Update.In a move that could significantly impact the investment landscape into pooling vehicles, India’s securities regulator Securities and Exchange Board of India has held that investors in alternative investment funds will be liable for breach of insider trading norms if: Such investors possess unpublished price sensitive information in relation to any entity; andAIF trades in the securities of such entity. SEBI’s guidance is likely to hamstring the operations of an AIF/ pooled investment vehicle in many ways – since AIFs are operated by an independent investment manager and the investors exercise no control/ visibility on the trades executed by the AIF. First, should each unitholder of an AIF now negotiate for complete visibility on trades being executed by the AIF? Second, is it commercially viable for AIFs to be precluded from investing/ divesting merely because one of its investors possesses UPSI, so that its investors can comply with insider trading laws? Third, what is the duty of the AIF if an investor informs it of being in possession of UPSI? Fourth, will SEBI’s guidance apply to all kinds of pooled investment vehicles, including listed REITs, InvITs?..Click on the attachment to read the full report:.DISCLAIMERThis alert does not constitute legal advice and is for information purpose only. This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

SEBI Holds AIF Investors In Breach Of Insider Trading Norms For Investment Decisions: Resolut Partners' Take

The regulator's guidance is likely to hamstring the operations of an AIF/ pooled investment vehicle in many ways.

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