Investor lobby IVCA seeks easier norms on the lines of Obama's JOBS Act to attract more investors

On the lines of the JOBS (Jumpstart Our Business Startups) Act, passed by former US President Barack Obama in 2012 which made fundraising from private sources much easier for startups, the Indian Private Equity and Venture Capital Association or IVCA has made a representation to the government to allow a broader set of investors to invest in riskier asset classes including new and unlisted businesses and government certified startups.
 
The proposed solution, on the lines of the JOBS Act, has called for investor accreditation termed as 'digitally-accredited qualified investor' or DAQI which will represent an 'investor Aadhaar" for qualifying investors.
 
So wherever a DAQI participates in an investment, the minimum and maximum quantum amounts for investment would not be fixed by regulators.
 
Also, a qualified investor will be entitled to make investments in a variety of asset classes including new and private businesses or startups to gain exemption from Angel Tax, AIFs(alternative investment funds), startup exchanges, angel funds approved by Sebi, peer-to-peer lending platforms and crowdfunding platforms, or HNI investments in derivatives.
 
"We need to diversify and create a much wider pool of people who are willing to participate in riskier asset classes to create jobs and boost innovation," said Gopal Srinivasan, managing director at private equity firm TVS Capital and the chairman IVCA. The industry body has suggested criteria such as knowledge of these asset classes as well a minimum income threshold among others to qualify investors.
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