The Securities and Exchange Board of India on 25th July 2022, has published the Securities and Exchange Board of India (Alternative Investment Funds) (Draft Amendment) Regulations, 2022 to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
Through this amendment, the definition for the term “not for profit organization, social enterprise, social impact fund, social stock exchange, etc has been notified.
Further regulation 16 which deals with the conditions for Category I Alternative Investment Funds in which sub-regulation (4) has been substituted as follows:
The following conditions shall apply to social impact funds in addition to the conditions
laid down in sub-regulation (1):-
- At least seventy-five percent of the investable funds shall be invested in unlisted securities or partnership interest of social ventures or in units of social ventures or in securities of social enterprises: Provided that an existing social impact fund may invest the remaining investable funds in securities of not for profit organizations registered or listed on a social stock exchange with the prior consent of at least 75% of the investors by value of their investment;”
- such funds may accept grants, provided that such utilization of such grants shall be restricted to clause (a)
Provided that the amount of grant that may be accepted by the fund from any person shall not be less than ten lakh rupees.
Provided further that no profits or gains shall accrue to the provider of such grants.
A social impact fund or schemes of a social impact fund launched exclusively for a not-for-profit organization registered or listed on a social stock exchange, shall be permitted to deploy or invest hundred percent of the investable funds in the securities of not-for-profit organizations registered or listed on a social stock exchange.