SEBI whole-time member Ananth Narayan G. stated that the issue of alternative investment funds (AIFs) circumventing regulations has been “resolved” after a year-long dialogue with the industry. He mentioned that the regulator had discovered cases of AIFs being structured to bypass NPA recognition, FEMA, Sarfaesi, and other SEBI regulations. Narayan emphasized that the regulator has successfully addressed the issue of AIFs being used to evade regulations.
Speaking at an event organized by CII, Narayan highlighted a trust deficit in the industry, as the regulator was not informed about these violations by the industry itself but by other stakeholders. He mentioned that the regulator collaborated with industry lobby IVCA to establish a framework that addresses all loopholes with industry consensus. Narayan urged the industry to trust the regulator and raise governance concerns. He emphasized the importance of reporting any governance issues for the betterment of the industry.
Narayan stressed the need for trust and transparency in the industry, stating that governance involves more than just ensuring clean practices. He encouraged industry players to speak up if they observe any infractions. The regulator is committed to co-creating a regulatory framework that promotes capital formation while maintaining trust and ease of doing business, aligned with recent comments made by SEBI’s chief Tuhin Kanta Pandey.
Overall, the industry, regulators, and stakeholders are working together to ensure compliance and transparency in the AIF sector, addressing concerns and strengthening the trust among all participants.
