SEBI on Tuesday, 28th dec 2021 has amended and introduced a Special Situation Fund under category I AIF as mentioned below and elaborated in the link below: https://lnkd.in/efYzd8_J

1. AMENDMENT TO
SEBI (ALTERNATIVE
INVESTMENT
FUNDS)
REGULATIONS, 2012
(AIF REGULATIONS)

2. SEBI on DEC 28th, 2021
approved amendment to AIF
Regulations and introduced the
“Special Situation Funds (SSFs)",
a sub-category under Category I
AIF. The funds will be allowed to
invest only in ‘Stressed assets’
which consists of stress loans,
security receipts issued by ARCs,
securities companies in distress
or any other security as
prescribed by SEBI.

3. The special situation funds are
exempted from investment
concentration norm in a single
investee company also, no
restrictions are prescribed for
investing their investible funds
in unlisted or listed securities
of the investee company.
Minimum corpus of INR 100 Cr
is specified for this fund.

4. Minimum investment by an
investor in this fund is required
to be INR 10 Cr where else the
minimum investment amount
for accredited investor is set to
be INR 5 Cr. Due diligence
mandated by the RBI for
ARC’s investors will also be
applicable to SSFs while
acquiring stressed loans in
terms of RBI.