SEBI Regulations

(a) A broad based definition of a VCU may he included in the regulations.

(b) The definition of a VCF should be amended to include the funds set up, scheme floated by a trust, company body corporate or other legal entities.

(c) The investment criteria needs to be redefined to permit investment by a VCF, primarily in equity or equity related instruments or securities convertible into equity of VCUs and also by way of subscription to an IPa and preferential offer in case of companies to be listed or already listed. The limit of at least 80 per cent of the funds raised by may be dispensed with and new investment criteria may be incorporated as under; (1) The VCF will disclose the investment strategy at the time of application for registration, (2) TIle VCF will make investment in the securities of venture capital undertakings as enumerated below; (i) at least 10 per cent of the funds invested in venture capital undertakings should be invested in unlisted equity shares or equity related instruments or securities convertible into equity; and (ii) not more than 30 per cent of investment may be made only by a VCF by way of subscription to the initial public offer made by VCUs whose shares are proposed to be listed; or by way of preferential allotment of equity in the case of VCUs whose shares are listed on a recognized stock exchange.

(d) The provisions for investment in listed securities of sick companies may be dispensed with.

(e) The provision permitting financial assistance in any other manner, to companies in whose equity shares a VCF has invested needs to be dispensed with.

(f) The provision for investment in sick companies and financial assistance in any other manner may be: dispensed with.

(g) The existing provisions for approval of placement memorandum by SEBI may be dispensed with but the content of placement memorandum may be strengthened to include all the significant information necessary for an investor to arrive at a fair decision.

(h) The regulatory requirement of compulsory registration of trust deed under the Indian Registration Act may be dispensed with.

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