SEBI Allows Most AIFs To Launch Schemes In 30 Days Under Fast-Track Rules, Excludes Large-Value Funds

The Securities and Exchange Board of India (SEBI) on Thursday introduced a fast-track mechanism allowing Alternative Investment Funds (AIFs), except Large Value Funds, to launch schemes and circulate placement memorandums (PPMs) 30 days after filing with the regulator.

The move is aimed at easing timelines for fund launches by shifting to a disclosure-based regime, while retaining regulatory oversight through post-filing review.

Under the circular, AIFs (other than Large Value Funds) can proceed with launching new schemes and circulating PPMs to investors after 30 days from the date of filing the application with SEBI. In the case of first schemes, AIFs may launch from the date of grant of registration or after 30 days from filing of the application with SEBI, whichever is later.

SEBI has mandated that any comments issued during this 30-day period must be complied with by the Merchant Banker and the AIF prior to the launch of the scheme or circulation of the PPM.

The regulator has also stipulated that the first close of a scheme must be declared within 12 months from the date on which the AIF becomes eligible to launch the scheme.

Responsibility for the accuracy and completeness of disclosures in the PPM, as well as the declarations submitted, will rest with the Merchant Banker and the AIF Manager.

Clarifying the regulatory position, SEBI said that submission of a PPM does not amount to approval by the regulator and that it does not assume responsibility for the accuracy or correctness of disclosures, facts, or claims made in the document. It added that any irregularity or lapse in the PPM would make the concerned entities liable for action.

The circular will come into force with immediate effect and will also apply to all pending PPMs of non-Large Value Fund schemes.