Sebi Revises AIF Norms: New Extensions and Borrowing Rules for Large Value Funds

The Securities and Exchange Board of India (Sebi) has updated the norms for alternative investment funds (AIF), allowing large value funds for accredited investors to extend their tenure by up to five years, given certain conditions. Additionally, Category I and II AIFs are permitted to borrow funds for up to 30 days to address temporary shortfalls.

The Securities and Exchange Board of India (Sebi) has revised norms for alternative investment funds (AIF), introducing new guidelines on tenure extensions and borrowing rules for large value funds.

According to a recent notification, Sebi will now allow large value funds for accredited investors to extend their tenure by up to five years, given that two-thirds of the unit holders approve. This decision aims to provide clarity for investors regarding their investment timelines.

In addition, Sebi has permitted Category I and II AIFs to borrow funds for up to 30 days to cover temporary funding gaps during investment periods. These measures are expected to simplify operations and enhance business flexibility.

(With inputs from agencies.)