This Regulatory Alert summarizes the Notification dated 16 September 2013 issued by Securities and Exchange Board of India (SEBI) notifying SEBI (Alternative Investment Funds) (Amendments) Regulations, 2013 amending the SEBI (Alternative Investment Funds) Regulations, 2012. These amendments shall come into force on the date of publication in the Official Gazette.
The Notification has introduced a new category ‘Angel Funds’ within the definition of Venture Capital Funds under Category I- Alternative Investment Funds, as well as prescribed the registration requirements, investment parameters and other conditions for Angel Funds. Further, the Notification also makes provisions for obtaining in-principle approval by the applicants.
The introduction of ‘Angel Funds’ within the definition of VCF by the market regulator, SEBI, is a welcome move to encourage entrepreneurship and finance small businesses by way of notifying new norms for angel investors, who provide funding to companies at their initial stages.
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