Sebi Unveils New Guidelines for Alternative Investment Fund Schemes

Sebi issued guidelines for transitioning existing Alternative Investment Fund schemes into accredited investor only schemes or Large Value Funds. The move aims to provide additional flexibilities and requires positive consent from investors. New AI-only schemes or LVFs must include 'AI only fund' or 'LVF' in their titles.

The Securities and Exchange Board of India (Sebi) has released guidelines for the migration of current Alternative Investment Fund (AIF) schemes to accredited investor-only configurations or Large Value Funds. The transition will rely on obtaining affirmative consent from investors and fulfilling certain specified conditions.

This decision follows a November amendment by Sebi that created a distinct category for Accredited Investor-only schemes, affording them reduced compliance requirements. These flexibilities relax investment protection obligations and grant operational liberties to Large Value Funds attending exclusively to accredited investors.

Newly established schemes will signal their status with 'AI only fund' or 'LVF' in their titles, as stipulated by Sebi. Changes must be communicated to Sebi and relevant depositories within 15 days. Furthermore, Sebi informs that Large Value Funds will benefit from exemptions in the placement memorandum templates and associated annual audits.

(With inputs from agencies.)