FACTBOX - India's regulations for hedge fund licence applicants

MUMBAI (Reuters) - The Securities Exchange Board of India imposed rules on alternative investment funds in May 2012.

The capital markets regulator organises alternative investment funds - such as venture capital, social venture funds, small and medium enterprise funds and hedge funds - under three categories.

Hedge funds fall under a category that allows them to undertake leverage and employ complex trading strategies.

Below are some of the rules set for this category:

* Such a fund must manage assets with a total value of at least 200 million rupees.

* An individual investor must contribute at least 10 million rupees to the fund.

* The manager/sponsor must own a stake of 5 percent of the assets under management, or 100 million rupees, whichever is lower.

* No fund can have more than 1,000 investors.

* Funds may be open-ended or close-ended.

* Funds cannot invest more than 10 percent of assets in one company.

* Funds must disclose information regarding the overall level of leverage.

* Foreign funds can apply for licenses, provided they establish or incorporate a fund locally.

* Funds can raise money from all investors, including foreign investors.

(Reporting by Subhadip Sircar; Editing by Ryan Woo)