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ARTICLE · 15 DECEMBER 2023

SEBI's Consultation Paper On Special Situation Funds: Key Takeaways

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The Securities and Exchange Board of India ("SEBI") recently introduced a consultation paper ("Consultation Paper") to amend the extant regulatory framework governing Special Situation Funds ("SSFs").

IndiaFinance and Banking
Pritha Chatterjee
Pritha Chatterjee
Abhishek Jha
Abhishek Jha
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1. INTRODUCTION

The Securities and Exchange Board of India ("SEBI") recently introduced a consultation paper ("Consultation Paper") to amend the extant regulatory framework governing Special Situation Funds ("SSFs"). Pursuant to the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations"), SSFs are a separate category of Alternative Investment Funds ("AIF") which are permitted to invest exclusively in 'special situation assets' which, presently, include inter alia stressed loans available for acquisition as described under Clause 58 of the Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 ("RBI Master Directions"). Interestingly, such stressed loans can only be transferred to entities listed in the Annex to the RBI Master Directions, which currently do not include SSFs.

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