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Investments of Category II AIFs in listed debt securities rated A or below will be treated as akin to investments in unlisted securities
24-Mar-2025, 06:26
The board of the Securities and Exchange Board of India (SEBI) has stated that currently, Category II AIFs are required to hold a majority of their investments in unlisted securities. The recent changes to SEBI Listing Obligations and Disclosure Requirements Regulations (LODR) 2015, inter alia, require that any entity that has issued listed debt securities can issue fresh debt only in listed form. There is a likelihood that debt securities that could have been issued in unlisted form, will now have to be listed. The resultant drop in availability of unlisted debt securities can come in the way of AIFs complying with the minimum investment norms in unlisted securities. To address this, and to give a fillip to issuance of and trading in lesser rated debt securities, investments of Category II AIFs in listed debt securities rated 'A' or below will be treated as akin to investments in unlisted securities for the purpose of their compliance with minimum investment conditions in unlisted securities.
The board of the Securities and Exchange Board of India (SEBI) has stated that currently, Category II AIFs are required to hold a majority of their investments in unlisted securities. The recent changes to SEBI Listing Obligations and Disclosure Requirements Regulations (LODR) 2015, inter alia, require that any entity that has issued listed debt securities can issue fresh debt only in listed form. There is a likelihood that debt securities that could have been issued in unlisted form, will now have to be listed. The resultant drop in availability of unlisted debt securities can come in the way of AIFs complying with the minimum investment norms in unlisted securities. To address this, and to give a fillip to issuance of and trading in lesser rated debt securities, investments of Category II AIFs in listed debt securities rated 'A' or below will be treated as akin to investments in unlisted securities for the purpose of their compliance with minimum investment conditions in unlisted securities.
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