TagVenture Capital

Year-End Reforms from SEBI

We wish our readers a very happy 2015! The end of 2014 was marked by a flurry of announcements from SEBI, some of which are briefly discussed in this post. Re-Classification of Promoters as Public The concept of “promoters” is quite significant in the Indian context as it is relevant for various purposes. While the existing SEBI regulations define a “promoter”, the circumstances are not entirely...

Foreign Direct Investment: Trusts as Investment Vehicles

[Vishal Achanta has contributed the following guest post. Vishal is a 5th year student at the National University of Advanced Legal Studies, Kochi] Recently, two investment vehicles have been introduced that as per the relevant SEBI regulations are to be set up as trusts: Real Estate Investment Trusts (‘REITs’) and Infrastructure Investment Trusts (‘IITs’). Both are intended to be pooling...

Guest Post: Comments on SEBI’s Crowdfunding Paper

[The following post is contributed by Debanshu Mukherjee, a Senior Resident Fellow at Vidhi Centre for Legal Policy, New Delhi] Last month, SEBI had issued a Consultation Paper on regulating Crowdfunding in India. Vidhi Centre for Legal Policy, a New Delhi based independent and not-for-profit think-tank prepared a detailed response to the Paper and submitted it to SEBI earlier this month...

SEBI Notifies Regulations on Alternative Investment Funds

Last year, SEBI had issued a concept paper on comprehensive regulation for alternative investment funds (AIFs). The proposal to set up a separate framework was approved by SEBI at its board meeting held last month. This proposal has now been operationalised by the promulgation of the SEBI (Alternative Investment Funds) Regulations, 2012, which were notified yesterday. These new regulations are...

Secondary Market Purchases by Foreign Venture Capital Investors

The Reserve Bank of India (RBI) has issued a circular that expands the scope of investments that foreign venture capital investors (FVCIs) can make in Indian companies. Hitherto, FVCI investments were permitted either through initial public offerings or through private placements. Under the new regime, FVCIs may acquire shares in the secondary markets from existing shareholders. The operative...

Venture Capital Funds: Minimum Investment Norms

(The following post is contributed by Ravi Shankar Jha, a final year student at the Dr. RML National Law University, Lucknow. It points to a lacuna in SEBI’s Venture Capital Funds Regulations) Venture capital funds (VCFs) have been envisaged to provide easy capital to start-up firms. In India, VCFs are regulated by SEBI (Venture Capital Funds) Regulations, 1996. Through these regulations, SEBI...

Regulating Foreign Venture Capital Investors

In a post on the Critical Twenties blog, Sarika raises a number of issues (both legal as well as practical) that plague the regulatory system governing foreign venture capital investors (FVCI). Although success in innovation is usually propelled by a facilitative legal, regulatory and contractual system that allows unimpeded flow of capital to finance such innovation, the issues highlighted in...

Venture Capital – Foreign and Domestic: Some Comparisons

Consistent with the expansion of the venture capital industry in India, the regulatory regime has been formulated with a view to foster such growth. While the domestic venture capital industry is governed by the SEBI (Venture Capital Funds) Regulations, 1996, the foreign venture capital industry (investing into Indian companies) is governed by the SEBI (Foreign Venture Capital Investors)...

Foreign Venture Capital: Firm Commitment

In order to obliterate the disparity in firm commitment requirements for domestic venture capital funds (VCFs) and foreign venture capital investors (FVCI), SEBI has introduced a new requirement whereby FVCIs are to obtain firm commitment from their investors for contribution of at least US$ 1 million at the time of submission of application seeking registration as FVCIs. Domestic VCFs are...

India and China: Foreign Investment and Venture Capital

RBI/2008-09/ RBI/2008-09/ The Asian Journal of Comparative Law has just published an interesting article that compares foreign direct investment (FDI) and venture capital investment in the two Asian economic giants. In Unraveling the Puzzle of Differing Rates of FDI and FVCI in India and China the authors Haitian Lu, Hong Huang and Swati Deva find that when it comes to FDI, China scores better...

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