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The Securities and Exchange Board of India is “serious” about investor protection issues in alternative investment funds (AIFs) such as private equity funds and hedge funds, a top SEBI official has said.
The capital market regulator is keen to ensure that such funds do not become tools in the hands of those people who come up with money-spinning schemes to defraud people, Mr Prashant Saran, SEBI Whole-time Member, said at an event organised by the Indian Private Equity and Venture Capital Association here on Thursday.
He highlighted that anybody who is investing in the organised sector should have protection against misrepresentation and fraud.
SEBI has taken over three years to frame regulations for AIFs.
It will soon notify the regulations for governing such funds, he said, adding that the proposed framework should pave the way for creation of “India-based Indian alternative funds industry.”
He said most of the private equity and venture capital industry in India is more in the nature of foreign direct investment. They are not India-based funds, Mr Saran pointed out.
Mr Saran made it clear that SEBI's idea is not of importing private equity capital into India through the FDI route.
“That is an area for RBI and DIPP to look into. We are not focused on that,” he said.
SEBI wants, through the proposed AIF regulations, to help build a developed private equity industry drawn mainly from the domestic pool of capital.
This will help provide stability in India and an alternative investment channel to investors.
Mr Saran said private equity funds have an important economic role to play in India.
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