MoU to open gateway for marketing AIFs in Europe Union

The Securities and Exchange Board of India (Sebi) on 28th July signed a bilateral memorandum of understanding (MoU) with 27 market regulators of European Union (EU) for the marketing and sale of Alternative Investment Funds (AIF), the regulator stated via a press release.

The bilateral agreement will enable Indian fund managers to manage and market AIFs in the EU region and the EU fund managers will be able to tap the Indian markets.  

This agreement comes in three years after the European council adopted, EU Alternative Investment Fund Managers Directive (AIFMD) which requires adequate supervisory cooperation arrangements between regulatory authorities.

Under the framework of AIFMD, it is required that the EU and non - EU regulators have agreements in place for allowing greater market access and cross border functioning of the AIF business.

“With the lack of MoU between India and EU nations the investments in AIFs used to face legislative hurdles. Currently, there are couple of funds that have necessary approvals for foreign investment so, this move by Sebi could have been done in anticipation of a future markets for AIFs,” said Tejesh Chitlangi, Partner, IC Legal.  

So far, SEBI has signed 20 bilateral MoUs with nations worldwide for mutual assistance and cooperation.