Sponsor investments in IFSC AIFs to come under the automatic route

RBI relaxation to allay round tripping concerns associated with sponsor commitment and shorten fund set-up time in IFSC

The Reserve Bank of India (RBI) has allowed sponsor investments by Indian entities in alternative investment funds (AIFs) set up in an overseas jurisdiction or in an International Financial Services Centre (IFSC) in India to come through the automatic route.

The relaxation is expected to resolve the issue of round tripping associated with sponsor commitment and will shorten the set-up time for fund managers wanting to establish their IFSC presence

"It has been decided that any sponsor contribution from a sponsor Indian Party to an AIF set up in an overseas jurisdiction, including IFSCs in India, as per the laws