MC Inside Edge: Betting big on green & solar, a comedy of errors for a digital major, Cat 3 AIFs knock PFRDA, IRDAI doors

It might sound funny at first but it is a peculiar situation being faced by one of the marquee names from the start-up world, also among the first ones to list on the stock exchange platform in 2021. The company recently received a show cause notice from Sebi for an alleged few days' delay in making a mandatory disclosure to the stock exchanges. The company believed it made the requisite disclosures only to realise later that the statement was mistakenly emailed to some email id of the stock exchange rather than sent in a manner that would have made the statement publicly available to everyone through the stock exchange announcement section. Not an intentional mistake, one may say, but the company, which is already under the scanner of another powerful regulator, has to face the regulatory music for this one as well.

Category 3 AIFs seek level playing field

There is an aura of mystery around Category III Alternative Investment Funds (AIFs). This category of AIFs typically uses diverse or complex trading strategies and even leverage through investments in listed or unlisted derivatives. Cat 3 AIFs, as they are popularly called, generally include hedge funds and private investment in public equity (PIPE) funds among few other kinds of structures. Given their investment style, many in the industry believe they are the relatively more riskier ones and hence stay away in terms of committing funds. Among those with this belief include the two regulatory bodies – PFRDA and IRDAI – that look at only Cat 1 and Cat 2 AIFs. If industry sources are to be believed, then Cat 3 AIFs are aggressively pitching for attracting funds from entities regulated by these watchdogs as well. More importantly, sources say that the two regulators too are slowly warming up to the idea of Cat 3 AIF exposure.