The issue of alternative investment funds (AIFs) circumventing several regulations has been “resolved” after a year-long dialogue with the industry, said SEBI whole-time member Ananth Narayan G.
Speaking at an event organised by CII on Tuesday, the official said that the regulator found egregious cases of AIFs being structured to circumvent NPA recognition, FEMA, Sarfaesi and other SEBI regulations as well.
“We have, to our satisfaction, resolved this issue of AIFs being used to circumvent regulations,” Narayan said.
Trust-deficit in industry
There is a trust-deficit in the industry, he said, as the regulator did not come to know these violations from the industry, but other stakeholders.
The regulator then interacted with industry lobby IVCA to co-create and put in place a framework with the concurrence of industry that takes care of all the loopholes, he said.
He urged the industry and its lobbies to trust the regulator and bring such governance concerns to light. “The people on the ground know the best. Ask me, I’ve been a trader,” Narayan said.
There is a trust deficit in the industry, he said. “Governance is not just about ensuring that your nose is clean. If you see something, say something. This is not snitching,” he added.
The regulator is happy to co-create a regulatory framework that sustains capital formation with minimal errors so that trust is maintained and ease of doing business is maintained—along the lines of the new SEBI’s chief Tuhin Kanta Pandey’s recent comments.
