Sebi proposes including family trusts, NBFCs in QIB segment

Markets regulator Sebi has proposed including 'systematically important' NBFCs and some registered family trusts in the Qualified Institutional Buyers (QIB) category, a move that will put such entities at par with institutional investors like banks and mutual funds.
Further, the market watchdog has suggested that any other entity registered with Sebi and having a minimum networth of Rs 500 crore may also be considered as a QIB.
At present, QIBs are defined under Sebi regulations as those institutional investors, who are generally perceived to possess expertise and the financial muscle to evaluate and invest in capital markets.
The existing QIBs include public financial institutions like scheduled commercial banks, mutual funds, foreign institutional investor and venture capital funds.

In a new proposal, Sebi has said that the definition of QIBs "may be extended to include systematically important NBFCs as per RBI guidelines and family offices/ trusts, subject to such family offices/trust registering itself as Alternate Investment Funds (AIF)."
The Securities and Exchange Board of India (Sebi) has sought public comments till April 20 for this proposal, which is part of a draft paper on setting up an Alternate Capital Raising platform for start-ups.

The move is aimed at helping such companies raise funds from within India and stop their flight to overseas markets.
Under the proposed alternate capital raising platform, money should be raised only from institutions and high networth individuals by the new-age companies having innovative business model and belonging to knowledge-based technology sector. However, retail investors would be restricted from investing in such companies.

The regulator came out with this proposal after taking into account suggestions made by Primary Market Advisory Committee (PMAC) of Sebi.
The proposals on QIB would be applicable to all issuers irrespective of the listing on main board or the institutional platform.