The Securities and Exchange Board of India (Sebi) today made it mandatory for foreign venture capital investors (FCVI) to obtain a firm commitment from their investors for contribution of at least $1 million (about Rs 5 crore) for registration with the market regulator.
"... Applicants desirous of registering with Sebi as FVCIs shall obtain firm commitment from their investors for contribution of an amount of at least $1 million at the time of submission of applications," Sebi said.
With the change in the legal framework of Sebi (Foreign Venture Capital Investors) Regulations, 2000, the regulator has now brought about parity between FVCIs and domestic venture capital funds (VCF).
"It has been decided to bring in parity between domestic VCFs and FVCIs by requiring the applicants... To obtain firm commitment from their investors for contribution of an amount before the start of operations," it said.
For the domestic funds, VCF Regulations of 1996 have required them to "have firm commitment from the investors for... At least Rs 5 crore before the start of operations by the venture capital fund".