CIRCULAR
IMD/DOF-1/FVCI/CIR. No. 1/2009
July 3, 2009
To,
All Applicants Desirous of Registering as Foreign Venture Capital Investors Dear Sir / Madam,
Sub: Firm commitment requirement for registration as Foreign Venture Capital Investors
1. The SEBI (Venture Capital Funds) Regulations, 1996 (VCF Regulations) lay down conditions for “minimum investment in a venture capital fund” under Regulation 11 of VCF Regulations. The Regulation 11(3) of the VCF Regulations requires firm commitment from investors for contribution of an amount before the start of operations as provided below:
“Each scheme launched or fund set up by a venture capital fund shall have firm commitment from the investors for contribution of an amount of at least rupees five crores before the start of operations by the venture capital fund.”
2.However, the SEBI (Foreign Venture Capital Investors) Regulations, 2000, do not stipulate a similar requirement for Foreign Venture Capital Investors (FVCIs). It has been decided to bring in parity between domestic Venture Capital Funds and Foreign Venture Capital Investors by requiring the applicants desirous of registering with SEBI as FVCIs to obtain firm commitment from their investors for contribution of an amount before the start of operations.
3.Therefore, applicants desirous of registering with SEBI as the Foreign Venture Capital Investors, henceforth, shall obtain firm commitment from their investors for contribution of an amount of at least USD 1 million at the time of submission of applications seeking registration as FVCIs.
4. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
5. This Circular is available on SEBI website at www.sebi.gov.in, under the category – Circulars”.
Yours faithfully,
-sd-
Maninder Cheema
