In an attempt to provide a big push to early-stage startup ecosystem, markets regulator the Securities and Exchange Board of India (SEBI) is planning to raise the maximum investment by an angel fund in any venture capital (VC) undertakings to Rs 10 crore from the current Rs 5 crore. It noted that in this fast changing ecosystem, wherein angels are investing much higher amounts, such increase is needed to provide more opportunities to angel funds. However, it said that the minimum investment amount for an angel fund will continue to be Rs 25 lakh.
Besides, SEBI plans to halve the minimum corpus size required for an angel fund to register with it to 5 crore. It is considering to raise the maximum period of accepting funds from an angel investor to 5 years from the present limit of 3 years. This will allow angel funds more time to identify opportunities and invest in VC firms. Further, in line with the Companies Act, the regulator is looking to amend SEBI (Registrars to an Issue and Share Transfer Agents) norms and SEBI (Banker to an Issue) regulations that will enable a registrar as well as banker to an issue to maintain records of books of accounts and documents for a minimum period of eight years after completion of the relevant transactions.
The markets regulator also plans to provide an option to listed companies for distribution of cash benefits -- dividend of equity and preference shares as well as interest and maturity proceeds on debt instruments -- through the depositories in addition to the present system of distribution either directly by them or through the registrar to an issue and share transfer agents. As of now, there is a restriction on listed companies availing services of depositories for distribution of cash benefits.
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