The SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) were amended and notified on January 9, 2023 to allow Alternative Investment Funds (“AIFs”) to participate in Credit Default Swaps (“CDS”) buyers and sellers of protection from any credit default. Regulations 16(1)(aa), 17(da), 18(ab) and 20(11) of the AIF Regulations enable AIFs to participate in CDS in terms of the conditions as may be specified by SEBI from time to time. In this regard, SEBI issued a circular on January 12, 2023 specifying the following conditions:
Please find a copy of the circular, here.
This update has been contributed by Vinod Joseph (Partner) and Vasavi Khatri (Associate).
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