look news india
New Delhi: Indian investors and companies will now be able to invest in other global funds, including foreign funds established in the US and Singapore, without any restrictions. This will be possible after the amendments made by the Reserve Bank of India last week regarding foreign portfolio investment. RBI has issued a circular regarding amendments to the Foreign Exchange Management (Investment Abroad) Directions, 2022.
Under the amendments, all restrictions allowing Indian limited partners (LPs) to invest only in units issued by foreign funds have been removed. Investment in any scheme is now allowed. Also, the condition that investments can be made only in funds that are regulated by the regulator of the respective country, and not their investment managers, has also been removed. For example, regulators in Singapore and the US (in some cases), regulate fund managers rather than funds.
Industry experts say that new funds have been set up to enable investments by Indian limited partners in jurisdictions such as the Cayman Islands and Mauritius due to the restrictions. The regulatory changes will also give general partners the autonomy to launch their own funds in commercially friendly jurisdictions. They will not have to worry about whether Indian investment will come in or not.
The RBI move will allow NRI investors and corporates to invest directly in Singapore-based funds, giving them access to management expertise of global funds and world-class, strong investment jurisdiction credentials.
