Business Standard

Sebi bans fresh inflows into AIF schemes making 'priority distribution'

Schemes adopting such a model, which benefits one class of investors at the cost of others, have also been barred from investing in new companies

File photo: PTI

File photo: PTI

BS Reporter Mumbai
The Securities and Exchanges Board of India (Sebi) has asked Alternate Investment Funds (AIFs) to not accept any fresh investments in schemes that have adopted a priority distribution model, which benefits one class of investors at the cost of others.

The regulator has also prohibited such schemes from investing in a new company.

According to Sebi, certain schemes of AIFs have adopted a distribution waterfall that allows disproportional sharing of losses.

"It has been brought to Sebi’s attention that certain  schemes of AIFs  have adopted a distribution  waterfall in such a way, that one class of investors (other than sponsor/manager) share loss more
Topics : SEBI AIF

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First Published: Nov 23 2022 | 9:10 PM IST

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