Category 3 AIF QUERY

Does AIF cat 3 have limitation on exposure through derivatives? if yes how much ? @nithin @siva

Two times the fund value.

As per the Leverage Circular, leverage allowed by Category III AIFs is limited to two times the net asset value (β€œNAV ”) of such Category III AIF (on netted basis) (β€œLeverage Ratio ”). Leverage Ratio is calculated by dividing total exposure of the Category III AIF by the NAV of such Category III AIF. The Leverage Circular also provides that Leverage Ratio shall be calculated at the scheme level, therefore references to β€˜AIF’ and β€˜fund’ shall in this article shall be construed accordingly.3

NishithDesai

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