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TMI BlogModalities for launching Liquidation Scheme and for distributing the investments of Alternative Investment Funds (AIFs) in-specieX X X X Extracts X X X X X X X X Extracts X X X X ..... he winding up process, by either selling such investments to a new scheme of the same AIF ( Liquidation Scheme ) or distributing such unliquidated investments in-specie. Copy of the notification is available at link, wherein, inter alia, the following new regulations have been inserted in AIF Regulations 1.1. Regulation 2(1)(pb) : liquidation period means a period of one year following the expiry of tenure or extended tenure of the scheme for fully liquidating the scheme of an Alternative Investment Fund. 1.2 . Regulation 2(1)(pc) : Liquidation scheme means a close ended scheme launched by an Alternative Investment Fund only for the purpose of liquidating the unliquidated investments purchased from its scheme, whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rranged for units representing consolidated value of each unliquidated investment of the Original Scheme s investment portfolio. (iv) The AIF shall disclose the bid value, along with the valuation of the unliquidated investments carried out by two independent valuers, to all the investors of the Original Scheme. (v) The dissenting investors of the Original Scheme who did not consent to sell the unliquidated investments to the Liquidation Scheme, shall be offered an option to fully exit the Original Scheme out of the 25% bid arranged by the AIF/ manager. After exercising the exit option by aforesaid dissenting investors, any unsubscribed portion of the bid shall be used to provide pro-rata exit to non-dissenting investors. (vi) If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Liquidation Scheme shall be calculated from the date of filing of PPM with SEBI and such tenure shall not be more than the tenure of the Original Scheme excluding any permissible extension. (xii) Liquidation Scheme shall not extend its tenure or sell its investments to another Liquidation Scheme. Further, Liquidation Period, as defined in Regulation 2(1)(pb) , shall not be available to Liquidation Scheme. (xiii) If an AIF (viz. A1) has invested in units of another AIF (viz. A2) and the investee AIF (i.e. A2) has launched a Liquidation Scheme, then the investor AIF (i.e. A1) upon expiry of its tenure or extended tenure, shall mandatorily distribute the units of Liquidation Scheme held by it, in-specie to its investors (i.e. investors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red an option to fully exit the Original Scheme out of the 25% bid arranged by the AIF/ manager. After exercise of the exit option by aforesaid dissenting investors, any unsubscribed portion of the bid shall be used to provide pro-rata exit to non- dissenting investors. (v) If the bidder or its related parties are investors in the Original Scheme, they shall not be provided exit from the Original Scheme out of the bid. [Related party shall have same meaning as provided in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 .] (vi) Subsequently, the unliquidated investments shall be distributed in-specie. For capturing in the track record of the manager and for reporting to Performance Benchmarking Agencies, the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f unliquidated investments, such investments shall be written off. 2.4. Responsibility for compliance: (i) The manager, trustee and key management personnel of AIF and manager shall be responsible for compliance with the procedure prescribed above. (ii) The manager of AIF, upon exercising any of the options mentioned above, shall submit report on compliance with the provisions of this circular on SEBI Intermediary Portal (www.siportal.seb.gov.in) in the format as specified therein. (iii) The manager of AIF shall report the value, as specified above, with regard to sale of unliquidated investments to Liquidation Scheme or distribution of unliquidated investments in-specie, to Performance Benchmarking Agencies in a timely manner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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