In India, the regulation of hedge funds is a crucial aspect of the financial landscape. When it comes to larger hedge funds, they fall under the purview of the Securities and Exchange Commission (SEC), much like mutual funds and ETFs. However, for smaller hedge funds and those that meet the criteria of private equity advisors, the oversight responsibility shifts to the Securities and Exchange Board of India (SEBI).
The introduction of hedge funds to India’s financial market was a significant development brought about by the SEBI Alternative Investment Funds Regulations in 2012. This move aimed to provide a structured framework for the functioning of hedge funds within the country. With this regulatory framework in place, hedge funds operating in India must adhere to the guidelines set forth by SEBI, ensuring transparency and accountability in their operations.
SEBI plays a crucial role in overseeing and regulating various aspects of the financial sector in India, including hedge funds. Through its regulations and guidelines, SEBI aims to promote investor protection and maintain the integrity of the market. This approach not only fosters a more secure investment environment but also contributes to the overall stability and growth of India’s financial markets.
(Response: Hedge funds in India are regulated by the SEC for larger funds, while smaller ones and those qualifying as private equity advisors fall under the oversight of SEBI. The SEBI Alternative Investment Funds Regulations of 2012 introduced a framework for hedge funds in India, ensuring they operate within established guidelines and promote market integrity.)