Government amends pattern of investment to be followed by Non-Government Provident Funds, Superannuation Funds and Gratuity Funds

MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION

New Delhi, the 15th March, 2021

F. No. 1/8/2021-PM.— In the notification of the Government of India, Ministry of Finance, Department of Financial Services, No. 11/14/2013-PR, dated the 2nd March, 2015, published in the Gazette of India, Extraordinary, Part I, Section 1 dated the 2nd March, 2015, the Central Government hereby makes the following amendments, namely:—

In the said notification, in the table, in column 2, under the heading “INVESTMENT PATTERN” against category (v), after clause (d), –

i. The following clause shall be inserted namely:-

“(e) Units issued by Category I and Category II Alternative Investment Funds (AIF) regulated by the Securities and Exchange Board of India.”

ii. In the first proviso, for the words, bracket and number ‘under this category No. (v)’ words, bracket and letters ‘in sub-categories (a) to (d)’ shall be substituted.

iii. In the second proviso, for the words ‘under this category’ words, bracket and letters ‘in sub-categories (a) to (d)’ shall be substituted.

iv. After the third Proviso, following may be inserted:-

“The investments in category (e) is allowed subject to satisfaction of the following conditions:-

i. The Permitted funds under Category I are infrastructure funds, SME Funds, Venture Capital Funds and Social Venture Capital Funds as detailed in Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012;

ii. For category II- AIF as per SEBI (Alternative Investment Funds) Regulations, 2012, at least 51% of the funds of such AIF shall be invested in either of the infrastructure entities or SMEs or venture capital or social welfare entities;

iii. Funds shall invest only in those AIFs whose corpus is equal to or more than Rs. 100 crores;

iv. The exposure to a single AIF shall not exceed 10% of the AIF Size. However, this limit would not apply to a Government sponsored AIF;

v. Funds to ensure that investment should not be made directly or indirectly in securities of the companies or Funds incorporated and/or operated outside India;

vi. The Sponsor of Alternative Investment Fund should not be the promoter in the Fund or the promoter group of the Fund; and

vii. The AIFs shall not be managed by investment manager, who is directly or indirectly controlled or managed by the Fund or the promoter group of the Fund.”

ANAND MOHAN BAJAJ, Addl. Secy. (Financial Markets)

Note : The principal notification was published in the Gazette of India, Extraordinary, Part 1, Section 1, vide No. 11/14/2013-PR, dated the 2nd March, 2015 and subsequently amended vide No. 11/14/2013-PR, dated the 12th February, 2019 and No. 10/41/2018-PM (Part-2) dated 11 December 2019.

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