SEBI has proposed amendments to the SEBI (Alternative Investment Funds) Regulations, 2012 through the Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA) mechanism to accelerate the launch of AIF schemes and facilitate faster deployment of capital. The proposal reduces the launch timeline for Regular schemes from 30 days to 10 working days by relying on Merchant Banker due diligence and declarations from AIF managers instead of prior SEBI review of Placement Memoranda (PPMs). For Accredited Investor (AI) only schemes and Angel Funds, SEBI proposes immediate launch upon filing of the PPM, dispensing with the requirement of filing through a Merchant Banker and replacing the Merchant Banker due diligence certificate with undertakings from the CEO and Compliance Officer of the AIF manager. SEBI will continue post-facto scrutiny of scheme documents based on risk assessment, with regulatory action for any lapses. The proposals, supported by stakeholder consultations, aim to simplify compliance, improve operational efficiency, and strengthen capital mobilisation while retaining appropriate regulatory oversight.
Also Read SEBI Press Release No. 33/2026 Dated: 19/06/2026: SEBI Approves Major Regulatory Reforms to Simplify Securities Market Processes
Securities and Exchange Board of India
Dated: 19th June 2026
Green-Channel: AIF Rollout Upon Document Acknowledgement’ (GARUDA) Mechanism for Processing of Placement Memorandum of Alternative Investment Funds (AIFs) filed with SEBI
1. Objective:
1.1. This Board Memorandum proposes to amend the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), to ease and expedite the process of launch of scheme/ funds by Alternative Investment Funds (‘AIFs’) in order to enable faster and more efficient deployment of capital by AIFs.
2. Issues under consideration:
2.1. AIFs, as an asset class, are instrumental in channelizing the capital of sophisticated investors to companies in need. Given the rapid expansion of the AIF industry in recent years, efficient capital deployment plays a pivotal role in sustaining this momentum and unlocking value for the broader economy. In this context, SEBI has recently reviewed the procedure for processing Private Placement Memorandums (PPMs) of AIFs for launch of schemes/funds. This review considered the sophistication of AIF investors, the expertise of Merchant Bankers in performing due diligence of disclosures in the PPM, and extensive stakeholder consultations, aiming to streamline the process of launch of scheme.
2.2. It may be noted that AIFs launch schemes/funds under three different buckets/tags, with varying regulatory concessions depending on the sophistication of their investor base, as under –
2.2.1. Large Value Fund for Accredited Investors (‘LVF’) – Scheme of AIF in which each investor is an Accredited Investor and invests minimum INR 25 Crore.
2.2.2. Accredited Investor Only Scheme/Fund (‘AI only scheme’) – Scheme of AIF in which each investor is an Accredited Investor, with no minimum investment amount prescribed. [Note: Vide an amendment in SEBI (AIF) Regulations, 2012, Angel Funds can onboard and raise funds only from Accredited Investors].
2.2.3. Non- Accredited Investor Scheme which excludes LVF, AI only scheme and Angel Fund (for ease of reference mentioned as ‘Regular schemes’ in this memorandum) – Scheme of AIF which on-boards investors primarily based on minimum investment amount of INR 1 crore. This includes Special Situation Funds (SSFs) as well.
2.3. Regulation 12 of SEBI (AIF) Regulations, 2012, inter alia, lays down norms for launch of scheme/ fund of AIFs as under:
2.3.1. The AIF may launch schemes subject to filing of placement memorandum (PPM) with SEBI.
2.3.2. Such PPM shall be filed with SEBI through a merchant banker at least thirty days prior to launch of scheme along with the prescribed fees.
2.3.3. SEBI may communicate its comments, if any, to the merchant banker prior to launch of the scheme and the merchant banker shall ensure that the comments are incorporated in the placement memorandum prior to launch of the scheme.
2.3.4. The requirements at para 2.3.2 and 2.3.3 above shall not apply to LVFs.
Similar provisions pertaining to raising of funds through private placement by Angel Funds by issue of placement memorandum are provided in Regulation 19 of AIF Regulations.
2.4. It may be noted that SEBI has taken various steps in the past to streamline the processing of registration/scheme launch applications and standardize the disclosures made in the PPM so that investors make an informed decision basis the same. In order to ensure that a minimum standard of disclosure is available in the PPM of AIFs, templates for PPMs were introduced vide SEBI circular dated February 05, 2020.
2.5. Further, to tackle the issue of errors and deficiencies (often recurring) observed in the PPM, the requirement of filing of PPM with SEBI through SEBI registered Merchant Banker was introduced vide SEBI circular dated October 21, 2021. Merchant Bankers have gained sufficient experience in conducting due diligence of the disclosures in the PPMs in the time period of almost five years since the introduction of Merchant Banker requirement in October 2021.
2.6. Upon filing of PPM with SEBI, till recently, SEBI had been reviewing the disclosures made in PPMs, Merchant Banker Due Diligence Certificate, etc. and providing comments, if any, to Merchant Banker/AIF. Thereafter, Merchant Banker/the AIF would carry out necessary changes incorporating the SEBI comments and submit revised PPM/ other documents to SEBI for taking the same on record. Once the PPM was taken on record, the scheme would be launched and the PPM circulated to prospective investors. Recently, the above procedure was revised and a fast track mechanism, as indicated at para 2.8 below, is currently in place.
2.7. Growth of the AIF industry and increased inflow:
2.7.1. The industry has been growing rapidly, with the number of AIFs as of March 31, 2026 standing at 1849, a significant progress in comparison to 732 AIFs by end of March 31, 2021, constituting a 135% growth in the last 5 years.
2.7.2. The cumulative commitments raised by AIFs amounts to INR 15.74 lakh crores and net investments made amounts to INR 6.45 lakh crores as on December 31, 2025, both growing at roughly 30% CAGR over the last 5 years.
2.7.3. With the rapid expansion of the industry, the inflow of applications has also surged commensurately as may be evidenced from the numbers given below:
| No. of applications | FY 2024-25 | FY 2025-26 |
| Registration Applications | 313 | 407 |
| First Schemes Applications | 313 | 407 |
| New Scheme Applications | 155 | 266 |
As on March 31, 2026, total 183 scheme applications were pending – 124 first schemes and 59 new schemes.
Issue 1: Streamlining regulatory timeline for filing of PPM by AIFs prior to launch of scheme:
2.8. Recently, as an Ease of Doing Business Measure, a Fast-Track Mechanism has been adopted for launch of schemes (other than LVFs) by AIFs, placing reliance on due-diligence certificate and declarations from Merchant Bankers and AIF Managers/Sponsors in place of SEBI’s review of PPM disclosures. Accordingly, as a first step, SEBI, vide circular dated April 30, 2026, inter alia clarified for new schemes that AIFs may now proceed with the launch of their Regular schemes, AI only schemes & Angel Funds and begin soliciting funds from investors 30 days after filing their application with SEBI, provided the regulator has not otherwise advised them. Further, for first schemes, it was clarified that AIFs can proceed with launch of such schemes from the date of grant of SEBI registration (or) after 30 days of filing of application with SEBI, whichever is later. This measure is intended to foster more efficient capital deployment by AIFs.
Pursuant to implementation of the Fast Track Mechanism, all 59 new scheme applications pending as on March 31, 2026 have been completed. Further, first scheme applications pending as March 31, 2026 have since been reduced from 124 to 39 as on May 31, 2026.
SEBI will carry out scrutiny of scheme documents post-facto on sample basis, based on risk assessment and specific criteria. In case of any irregularity or lapse in the PPM, concerned entities shall be liable for action.
2.9. Vide SEBI circular dated April 30, 2026, AIFs have been enabled to launch Regular schemes after 30 days of filing of PPM with SEBI. However, considering that the requirement of SEBI’s review of disclosures in PPM has been replaced with the procedure given at para 2.8 above, the 30-day regulatory timeline for filing of PPM by AIFs prior to launch of scheme can be further streamlined.
Issue 2: Relaxation for AI only schemes and Angel Funds:
2.10. Accredited Investor (AI) are considered a class of investors who have an understanding of various financial products and the risks-returns associated with them and hence, are able to take informed decisions regarding their investments. They are also perceived to be well advised, due to their ability to hire expert managers/ advisors and well informed with sufficient financial acumen.
2.11. Certificate of accreditation is granted by an accreditation agency to a person after verification of commensurate net-worth and/or income criteria specified by SEBI. In terms of provisions of AIF Regulations, certain entities specified by SEBI such as Central Government, State Governments, funds set up by them, development agencies under their aegis, etc. are deemed to be AIs and may not be required to obtain a certificate of accreditation.
2.12. The current accreditation numbers indicate growing traction in accreditation. The number of AIs as of May 31, 2026 stands at 3057, a growth of 371% in the last 12 months compared to 649 AIs by end of May 2025.
2.13. Further, based on data on investors accredited by accreditation agencies (‘certified AIs’), data available on deemed AIs and also information collected from depositories, it is observed that sum of par value of AIF units held by AIs, deemed and certified, amounts to INR 1,91,164 Crore as on December 31, 2025, which is roughly 30% of the total investments by the AIFs.
2.14. As a long term vision, it has been envisaged that AIF schemes shall have investor base constituting of only Accredited Investors (AIs). Considering the level of sophistication of AIs, AI only schemes and Angel Fund may warrant further regulatory relaxation to enable faster deployment of capital.
3. Proposed regulatory approach – ‘Green-Channel: AIF Rollout Upon Document Acknowledgement’ (GARUDA) Mechanism:
3.1. Proposal 1: – Reduction in the timeline for launch of Regular schemes –
3.1.1. Considering that the requirement of SEBI’s review of disclosures in PPM has been replaced with the procedure given at para 2.8 above, there is a scope to reduce the timeline of 30 days prescribed in AIF Regulations for filing of PPM prior to launch of scheme.
3.1.2. Accordingly, it may be deemed appropriate that AIFs be allowed to launch new schemes after 10 working days of filing of application with SEBI, unless otherwise advised.
3.1.3. In case of first scheme of AIFs, AIFs may proceed with launch of such schemes from the date of grant of SEBI registration (or) after 10 working days of filing of application with SEBI, whichever is later.
This would further enable faster and efficient deployment of capital by AIFs.
3.2. Proposal 2: For AI only schemes and Angel Funds – Dispensing the requirement of filing PPM through Merchant Banker and immediate launch of scheme/ fund –
3.2.1. AIs are perceived to possess adequate financial sophistication and risk appetite to evaluate complex products independently. Considering various factors such as level of sophistication of AIs, etc., investments by such AIs are not subject to the same regulatory oversight w.r.t investor protection as applicable to investments by other investors. Accordingly, certain relaxations were provided in the year 2021 under the respective SEBI Regulations to specific products/ services when availed by AIs.
3.2.2. Subsequently, in 2025, AI only schemes under AIF Regulations limited only to AIs with light touch framework was introduced. Further, as a long term vision, it has been envisaged that AIF schemes shall have investor base comprising of only AIs.
3.2.3. Further, framework of AIFs/ schemes called LVFs which comprise of AIs with minimum investment threshold of INR 70 crores was introduced in the year 2021 (such threshold was subsequently reduced to INR 25 crores in the year 2025). Such schemes were allowed to be launched immediately after filing of PPM with SEBI and were exempted from filing of such PPMs through Merchant Bankers. This enabled faster deployment of capital by LVFs. As on December 31, 2025, there were 134 LVF schemes with capital commitment of INR 2.53 lakh crores.
3.2.4. In continuation to this regulatory approach, it is felt desirable that funds/ schemes having only AI investor base may be given more certain operational flexibility to enable faster deployment of capital relative to other schemes comprising of non-accredited investors.
3.2.5. Accordingly, additional regulatory relaxation may be considered for AI only schemes and Angel Funds [Vide an amendment in SEBI (AIF) Regulations, 2012, Angel Funds can onboard and raise funds only from Accredited Investors], as given below:
3.2.5.1. For AI only schemes –
i. To permit immediate launch of first scheme from the date of grant
of SEBI registration. (PPM for first scheme is filed with SEBI along with application for AIF Registration)
ii. To permit immediate launch of new schemes upon filing of PPM with SEBI.
iii. To permit Manager of AIF to file such PPM directly with SEBI instead of filing it through Merchant Banker. Accordingly, the requirement of filing of Merchant Banker Due Diligence certificate shall be replaced with the Undertaking by Chief Executive Officer of Manager (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager of AIF.
3.2.5.2. For Angel Funds –
i. To permit immediate circulation of PPM to their investors for soliciting funds from the date of grant of SEBI registration.
ii. To permit Manager of AIF to file such PPM directly with SEBI instead of filing it through Merchant Banker. Accordingly, the requirement of filing of Merchant Banker Due Diligence certificate shall be replaced with the Undertaking by Chief Executive Officer of Manager (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager of AIF.
3.3. In essence, SEBI may adopt the following approach for new schemes:
3.4. As stated at para 2.8 above, scrutiny of scheme documents will continue to be carried out by SEBI post-facto on sample basis, based on risk assessment and specific criteria. In case of any irregularity or lapse in the PPM, concerned entities shall be liable for action.
3.5. This proposed regulatory approach is intended to reduce the timelines for launch of scheme by AIFs, while also retaining necessary regulatory oversight.
4. Consultation with Stakeholders and Public Consultation:
4.1. An agenda item in this regard was placed for discussion before the Alternative Investment Policy Advisory Committee (‘AIPAC’), in its meeting held on April 28, 2026. After deliberations, AIPAC recommended the proposals pertaining to reduction in the timeline for launch of Regular schemes; dispensing with the requirement of filing of PPM through Merchant Banker and immediate launch of scheme/ fund for AI only schemes and Angel Funds.
4.2. A consultation paper was issued on May 11, 2026 inviting public comments by June 01, 2026, on (i) reduction in the timeline for launch of Regular schemes; (ii) dispensing with the requirement of filing of PPM through Merchant Banker and immediate launch of scheme/ fund for AI only schemes and Angel Funds. A total of 61 comments have been received on the proposals of aforesaid consultation paper from 18 commenters (including AIFs, Investment Manager, investor and AIF industry associations).
4.3. Nearly all the commenters except two have concurred with the proposals. Some of the major suggestions/ comments and our views on the same, are as under –
4.3.1. A segment of commenters suggested that the term ‘launch’ of scheme/fund may be clarified.
Our views: For the purpose of the instant proposals, ‘launch’ of scheme/ fund would mean circulation of PPM to the investors for soliciting funds. The same may be clarified by means of a circular.
4.3.2. Certain commenters sought clarification regarding manner of computation of ‘working days’.
Our views: For the purpose of the instant proposals, ‘working days’ would mean all days, excluding Saturdays, Sundays and public holidays, on which concerned SEBI Office is closed for business, as published on SEBI website. The same may be clarified by means of a circular.
4.3.3. A few commenters suggested that outer time limit for registration of AIF may be specified.
Our views: SEBI endeavors to complete applications for grant of registrations as AIF within 30 working days. Processing of registration application comprises of various activities including obtaining comments from other regulators and/ or departments of SEBI. At times, applicant take considerable time to provide complete response to SEBI queries, which further adds to time taken for completion of registration activities. Further, pendency of registration applications is closely monitored for expeditious disposal and escalation matrix is published on the SEBI website in case of delay in processing.
4.3.4. Certain commenters suggested that the requirement of independent review of PPMs by a Merchant Banker or SEBI should continue for AI Only Schemes and Angel Funds.
Our views: As an ease of doing measure, the proposal to dispense with requirement of filing of PPM through Merchant Banker has been made considering the level of sophistication of Accredited Investors in AI only schemes and Angel Funds. The above measures have been proposed to improve efficiency in deployment of capital by AIFs and hence, the suggestion may not be accepted.
4.3.5. Certain commenters suggested that the requirement of annual PPM certification by a Merchant Banker for changes in terms of PPM be discontinued in AI only schemes and Angel Funds.
Our views: In the instant Board memorandum, it has been proposed to dispense with requirement of filing of PPM through Merchant Banker in AI only schemes and Angel Funds. Considering the suggestion received, AI only schemes and Angel Funds may file any changes in the terms of PPM directly with SEBI instead of filing through a merchant banker, accompanied with the requisite undertakings in the manner specified by SEBI. The same may be clarified by means of a circular.
4.3.6. A commenter stated that the proposed proviso to Regulation 12(3), stipulates that the requirements under Regulations 12(2) and 12(3), including the payment of fees as specified in the Second Schedule to the AIF Regulations, shall not apply to Accredited Investors-only funds. In this regard, commenter sought clarification on the applicability of fees for filing of such Accredited Investors-only funds.
Our views:
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- In terms of Regulation 12 of AIF Regulations, LVF schemes are exempt from filing their PPMs with SEBI through Merchant Banker and incorporating comments of SEBI, if any, in their PPM i.e. LVFs can launch their scheme under intimation to SEBI.
- At present, requisite fees as specified in Part A of Second Schedule of SEBI (AIF) Regulations, 2012 is paid for LVF schemes while filing of PPM with SEBI.
- In order to clarify the situation, as suggested by the commenter, it is stated that Scheme fees for AIFs as specified in Part A of Second Schedule of SEBI (AIF) Regulations, 2012 shall continue to be paid for Regular schemes, LVFs and AI only schemes while filing new scheme application with SEBI.
- Considering the foregoing, it is proposed to make appropriate amendments in AIF Regulations.
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A copy of the consultation paper and a detailed summary of the public comments received, along with SEBI’s views on the same, are placed at Annexure A and Annexure B respectively.
5. Proposals to the Board:
5.1. Considering the recommendations of AIPAC, the public comments received on the consultation paper, and internal deliberations, it is proposed that the AIF Regulations may be suitably amended –
5.1.1. Regular schemes of AIFs:
To reduce the timeline for launch of Regular schemes from 30 days to 10 working days by placing reliance on due-diligence carried out by Merchant Bankers and based on declarations from AIF Managers/Sponsors in place of SEBI’s review of PPM disclosures.
5.1.2. To permit launch of first scheme from the date of grant of SEBI registration (or) after 10 working days of filing of application with SEBI, whichever is later. (PPM for first scheme is filed with SEBI along with application for AIF Registration)
5.1.3. For AI only schemes –
i. To permit immediate launch of first scheme from the date of grant of SEBI registration.
ii. To permit immediate launch of new schemes upon filing of PPM with SEBI.
iii. To permit Manager of AIF to file such PPM directly with SEBI instead of filing it through Merchant Banker. Accordingly, the requirement of filing of Merchant Banker Due Diligence certificate shall be replaced with the Undertaking by Chief Executive Officer of Manager (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager of AIF.
5.1.4. For Angel Funds –
i. To permit immediate circulation of PPM to their investors for soliciting funds from the date of grant of SEBI registration.
ii. To permit Manager of AIF to file such PPM directly with SEBI instead
of filing it through Merchant Banker. Accordingly, the requirement of filing of Merchant Banker Due Diligence certificate shall be replaced with the Undertaking by Chief Executive Officer of Manager (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager of AIF.
5.1.5. For Regular schemes, LVFs and AI only schemes –
Scheme fees for AIFs as specified in Part A of Second Schedule of SEBI (AIF) Regulations, 2012 shall be paid for Regular schemes, LVFs and AI only schemes while filing new scheme application with SEBI.
5.2. Further, certain operational modalities may be specified by way of issuance of circular.
5.1. The draft amendment to the AIF Regulations and the draft notification for the proposed amendment are placed at Annexure C and Annexure D respectively.
6. The Board is requested to consider and approve the proposals set out in this Memorandum and to authorise the Chairperson to make consequential and incidental changes and take necessary steps required to give effect to the decisions of the Board.
Endl:
1. Annexure A(01 pages) – Consultation paper issued on May 11, 2026.
2. Annexure B(13 pages) – Summary of public comments received along with SEBI’s views.
3. Annexure C(01 pages) – Draft amendment to SEBI (Alternative Investment Funds) Regulations, 2012.
4. Annexure D(01 pages) – Draft notification for the proposed amendment.
Annexure A
The consultation paper is available at the following link:
