How are private market investments regulated?
Curious about private markets
In India, private market investments are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Alternative Investment Funds) Regulations, 2012. The regulations define alternative investment funds (AIFs) as privately pooled investment vehicles that collect funds from investors, whether Indian or foreign, for investing in accordance with a defined investment policy for the benefit of their investors.
The SEBI regulates AIFs by specifying the eligibility conditions for AIFs, including minimum investment amounts, the investment objective and policy, the types of investors who may invest, and the conditions for managing and operating the AIF.
AIFs may be classified into three categories based on the investment strategy and investment horizon: Category I, Category II, and Category III. Each category has its own investment restrictions and regulations, and the SEBI has set up specific rules for each category.
Additionally, the Reserve Bank of India (RBI) also regulates some types of private market investments, such as real estate investments made by foreign investors. The RBI has issued guidelines for foreign investment in Indian real estate, which specify the types of investments allowed and the conditions for making such investments.