The Securities and Exchange Board of India is in talks with the Finance Ministry to extend tax pass through status to alternative investment funds (AIFs), Mr U.K.Sinha, Chairman, SEBI, said here on Tuesday.
The capital market regulator had recently approved regulations for AIFs which include private equity funds, hedge funds and real estate funds.
If tax pass through status is granted to such funds, then only the investors behind such funds would get taxed. There would be no taxation at fund level, say tax experts.
Meanwhile, Mr Sinha also ruled out removal of concept of compulsory market-making in SME exchanges. “I would be happy if the combined wisdom in this room is to remove market making and then volumes in SME exchanges will flourish.
“I will do that tomorrow. But I don't think that is the case. Let us see how it progresses. SEBI will be happy to do refinements in the future,” he said at the CII annual session in the capital.
Mr Sinha also said that SEBI was open to the idea of allowing companies with no revenues to be listed in alternate platforms such as SME exchanges. He was responding to suggestion made by Ms Kiran Mazumdar Shaw, Biocon CMD, that companies should be allowed to list in SME exchanges even if they don't have revenues.
She said that innovation led businesses generate revenues years ahead and they should be allowed to list in SME exchanges even if they don't have revenues.