Selection of the fund vehicle/type requires careful planning and is driven by a variety of considerations as the same would have an impact on the investors in the fund particularly in their home jurisdictions.
Once the structure of the fund is finalized, the same must be meticulously incorporated in the fund documents, like the charter documents for
the fund entity, the private placement memorandum, the investment management agreement, the investment advisory agreement, etc. The private placement memorandum should also achieve a balance between the risk disclosure requirements and the marketing strategy. We co-ordinate with overseas counsel to obtain requisite information, if the fund is being marketed to investors in those jurisdictions
Liaison: Upon completion of the fund documents, we advise the fund on the local registration requirements. Domestic funds may register themselves with SEBI pursuant to which they are required to comply with certain investment restrictions and other prescribed conditions. Domestic funds are also accorded the pass-through status for Indian tax purposes upon the fulfillment of certain conditions. It is not mandatory for offshore funds to register with SEBI. However, there are certain benefits available to offshore funds that register with SEBI as “foreign venture capital investors” such as flexibility in entry and exit pricing, “Qualified Institutional Buyer” status, etc. Further, with respect to funds seeking to participate in the secondary markets, apart from drafting of the information memorandum, which is circulated to the investors of such fund, we advise and assist in obtaining registration as an FII or an FII sub-account.
