Decoding SEBI Circular On Permissible Investments By IFSC-AIFs

The Indian Government is keen on developing the international financial services center ('IFSC'), in Gujarat International Finance Tec-City (GIFT City), Gujarat, to bring to the Indian shores, those financial services transactions that are currently carried on outside India by overseas financial institutions. With the objective of promoting fund-raising and asset management in IFSC, the Securities and Exchange Board of India ('SEBI') had formulated the SEBI (International Financial Services Centres) Guidelines, 2015 dated March 27, 2015 ('SEBI IFSC Guidelines') allowing alternative investment funds ('AIFs') to be set up in the IFSC. Pursuant to the IFSC Guidelines, AIFs set up in IFSC ('IFSC-AIFs') are permitted to invest in the securities which are: (i) listed in IFSC; (ii) issued by companies incorporated in IFSC; and (iii) issued by overseas companies. Subsequently, by way of circular dated May 23, 2017, SEBI expanded the investment horizon for IFSC-AIFs by