Sebi modifies framework for valuation of AIFs' investment portfolio
Alternative Investment Funds (AIFs) whereby securities — other than unlisted, non-traded, or thinly-traded securities — will now be valued in line with mutual fund rules. This came after the Securities and Exchange Board of India (Sebi) received feedback from the AIF industry on challenges with the valuation framework and has made changes based on public comments and internal discussions.
Modifying the rules, the regulator said, «valuation of securities, other than unlisted securities and listed securities which are non-traded and thinly traded, for which valuation norms have been prescribed under Sebi (Mutual Funds) Regulations shall be carried out as per the norms prescribed under MF rules».
Further, valuation of thinly-traded and non-traded securities will be harmonized across Sebi-regulated entities by March 31, 2025.
Also, the regulator said changes in valuation methods to comply with these rules will not be considered «material changes,» but must be disclosed to investors.
With regards to independent valuers, Sebi said the framework for independent valuers of AIF portfolios now requires the valuer to be part of a registered entity such as ICAI, ICSI or a CFA charter.
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