Sebi opens faster route for rollout of AIF plans

Mumbai: The Securities and Exchange Board of India (Sebi) Thursday introduced a green channel mechanism to speed up the launch of Alternative Investment Fund (AIF) schemes, allowing funds to roll out new plans 10 days after filing their placement memorandum with the capital-markets regulator.

The new framework, called Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA), is aimed at quickening the introduction of AIF plans.

Under the revised norms, regular AIF schemes can be launched 10 days after filing the placement memorandum (PPM) with Sebi through a merchant banker.


However, AIFs can proceed with launch of their first schemes from the date of grant of Sebi registration after 10 days of filing of application with Sebi, whichever is later, the regulator said.

"The merchant banker shall independently exercise due diligence of all the disclosures in the PPM, satisfy itself with respect to veracity and adequacy of the disclosures and provide the due diligence certificate," Sebi said in a circular.

The regulator said the merchant banker appointed for filing of PPM should not be an associate of the AIF, its sponsor, manager or trustee.

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The merchant banker and the manager of the AIF would be responsible for ensuring the accuracy and completeness of all disclosures made in the PPMs of regular schemes, as well as in declarations submitted by them, it said.

The regulator has also provided flexibility to accredited investor (AI) only funds, large value funds (LVFs) and angel funds.

These categories will no longer be required to file their PPMs through a merchant banker. AI only funds and LVFs can launch schemes immediately after filing the PPM with Sebi, while angel funds can begin circulating their PPMs to investors immediately after receiving Sebi registration.

Instead of a merchant banker certificate, these funds will submit an undertaking from the CEO and compliance officer of the AIF manager confirming the accuracy of disclosures and compliance with regulations. The new rules come into effect immediately.