Tuesday, March 27, 2007

SEBI, RBI conduct studies for regulating PE funds

If media reports are to be believed, then private equity funds are in for a tough time ahead in the Indian markets. PE funds may come under the regulatory scanner in India, and though the ultimate regulator has not been decided upon, both Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) have formed study groups to analyze the structure and impact of such funds on the investors, the companies in which they invest in and their effect on corporate governance.

The issue has gained importance as a working group of International Organisation of Securities Commission (IOSCO) has been set up to study the impact of private equity funds on emerging markets. The Indian market regulator is the chairman of IOSCO’s emerging market committee, and will also have consultative discussions with other regulators during the 32nd annual conference of IOSCO to be hosted by SEBI in India this year.

Based on the joint findings of the study, the regulators may issue guidelines for listing and registration of such funds, for ensuring better monitoring. The purpose of the study is to ascertain if the actual investors in a private equity fund are loosing out during leveraged buyouts, de-listing and re-listing of the company.

Read more in the Business Standard article.

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