The Hindu : Business : Regulator exempts VCFs from seeking RBI nod

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Friday, Aug 10, 2007
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Regulator exempts VCFs from seeking RBI nod

Investment should be exhausted in
six months
VCFs can invest up to 10 p.c. in India connected cos.

MUMBAI: The Securities and Exchange Board of India on Thursday exempted venture capital funds (VCFs) from seeking Reserve Bank of India permission for investing in overseas companies.

“VCFs, desirous of making investments in off-shore venture capital undertakings (VCUs), may submit their proposal for investments to SEBI for its prior approval,” the regulator said, clarifying that a separate permission from the central bank is not needed.

The VCFs will be allowed to invest up to 10 per cent of their investible funds in companies which have Indian connection, SEBI said while issuing the guidelines for the funds. Indian connection would include those companies which have front offices abroad but back offices in the country. The allocation of investment limits to each VCF would be made on the ‘first come-first serve basis,’ depending on the availability in the overall limit of $500 million as earlier fixed by the RBI, the regulator said.

The allocated investment limit will have to be exhausted within six months, failing which the unutilised amount would be given to other interested VCFs. — PTI

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