In this Issue: Risk Mitigation in Fund Documents: A Guide for New Investors in Emerging Markets; Accessing Chinese Insurance Capital; Investment Adviser Regulations: A New Regime in India; FATCA Fun for Funds; Alternative Investment Fund Managers – Luxembourg's Attractive Features on Substance and Delegation; EMPEA Legal & Regulatory Timeline and EMPEA Guidelines Update
Legal & Regulatory Issues
There is no fundamental legal distinction between a private equity fund established to invest into emerging as opposed to developed markets. However, in practice, the legal terms customarily incorporated into the constitutive legal documents of emerging markets funds differ considerably from those included in developed market fund papers.
Chinese institutional investors have been playing an increasingly important role in the global investment management industry. However, to date, only a handful of Chinese institutions are able to make allocations to overseas investment funds. Additionally, there is a sizeable amount of insurance funds in China. Recent CIRC regulations governing global investments of the Chinese insurance capital lowered the entry barriers for many of the participants and expanded the eligible asset classes that insurance capital may invest in. This presents an exciting opportunity for international managers looking to raise funds in China.
On the 21 January 2013, the Securities and Exchange Board of India (“SEBI”) released the final SEBI (Investment Advisers) Regulations, 2013 (“IA Regulations”). Investment advisers were previously unregulated in India. With the enactment of the IA Regulations, SEBI has finally sought to plug this gap.
Over recent years the US FATCA disclosure regime, designed to tackle tax avoidance by US taxpayers, has become all too familiar to financial institutions the world over. This article does not attempt to explain the rules and regulations in detail, as others have done, but instead considers some of the specific challenges it brings to the private equity world.
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