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SEBI Outlines the Process for Dematerialisation / Crediting of Units by AIFs Where Investors Haven’t Provided Demat Account Details December 11, 2023
Published in: Investment Funds
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In June 2023, Securities and Exchange Board of India (“SEBI”) mandated all schemes of Alternative Investment Funds (“AIFs”) to issue or convert their units in dematerialised form within a specified timeframe.
SEBI, vide its circular dated December 11, 2023, has now laid down the process for dematerialising/ crediting the units issued by AIFs, where investors are yet to provide demat account details to AIFs.
The said circular sets out that managers of AIFs shall continue to reach out to existing investors to obtain their demat account details and credit the units issued to them to their respective demat accounts. In this regard, the AIF industry and depositories have been directed to adopt implementation standards as formulated by the pilot Standard Setting Forum for AIFs (SFA) along with the 2 depositories, in consultation with SEBI.
Further, units already issued by schemes of AIFs to existing investors who have not provided their demat account details, shall be credited to a separate demat account named ‘Aggregate Escrow Demat Account’. New units to be issued in demat form shall be allotted to such investors and credited to the Aggregate Escrow Demat Account. As and when such investors provide their demat account details to AIFs, their units held in the Aggregate Escrow Demat Account shall be transferred to the respective investors’ demat account within 5 working days.
The circular clarifies the following with respect to issuance and credit of units of AIFs in demat form:
To read the circular click here
For any clarification, please write to:
Mr. Yatin Narang
Partner
[email protected]
