SEBI (Alternative Investment Funds) (Amendment) Regulations, 2025

The Securities and Exchange Board of India (SEBI) issued the Alternative Investment Funds (Amendment) Regulations, 2025, on May 21, 2025. These new regulations amend the existing Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. The primary change introduced by these amendments concerns Category II Alternative Investment Funds (AIFs). As per the revised regulation 17, Category II AIFs are now permitted to invest in investee companies or in the units of Category I or other Category II AIFs, as long as these investments are disclosed in their Placement Memorandum. The explanation further clarifies that Category II AIFs are expected to invest primarily in unlisted securities and/or listed debt securities with a credit rating of ‘A’ or below from a SEBI-registered credit rating agency. This can be done either directly or through investments in units of other Alternative Investment Funds, in a manner specified by SEBI. These regulations came into effect upon their publication in the Official Gazette.

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 21st May, 2025

SECURITIES AND EXCHANGE BOARD OF INDIA (ALTERNATIVE INVESTMENT FUNDS) (AMENDMENT) REGULATIONS, 2025

F. No. SEBI/LAD-NRO/GN/2025/248.—In exercise of the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) and clause (c) of sub-section (2) of Section 11 and sub-section (1) and (1B) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, namely, –

1. These Regulations may be called the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2025.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, –

I. In regulation 17, clause (a) shall be substituted with the following, namely, –

“(a) Category II Alternative Investment Funds shall invest in investee companies or in the units of Category I or other Category II Alternative Investment Funds as may be disclosed in the Placement Memorandum;

Explanation – Category II Alternative Investment Fund shall invest primarily in unlisted securities and/or listed debt securities (including securitised debt instruments) which are rated ‘A’ or below by a credit rating agency registered with the Board, directly or through investment in units of other Alternative Investment Funds, in the manner as may be specified by the Board;”

BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./113/2025-26]

Footnote:

4. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were published in the Gazette of India on May 21, 2012 vide No. SEBI/LAD-NRO/GN/2012-13/04/11262.

5. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were subsequently amended on, –

(a) 16^thSeptember, 2013 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013 vide  No. LAD-NRO/GN/2013-14/24/6573.

(b) 23^rdMay, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/03/1089.

(c) 26^thSeptember, 2014 by the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/11/1576.

(d) 14^thAugust, 2015 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 vide No. SEBI/LAD-NRO/GN/2015-16/011.

(e) 4^thJanuary, 2017 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2016 vide No. SEBI/LAD/NRO/GN/2016-17/026.

(f) 6^thMarch, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037.

(g) 1^stJune, 2018 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2018 vide No. SEBI/LAD/NRO/GN/2018/19.

(h) 10^thMay, 2019 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019 vide No. SEBI/LAD/NRO/GN/2019/16.

(i) 17^thApril, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10.

(j) 19^thOctober, 2020 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2020 vide No. SEBI/LAD/NRO/GN/2020/37.

(k) 8^thJanuary, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2021 vide No. SEBI/LAD/NRO/GN/2021/01.

(l) 5^thMay, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2021 vide  No. SEBI/LAD-NRO/GN/2021/21.

(m) 3^rdAugust, 2021 by the (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30.

(n) 3^rdAugust, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/33.

(o) 13^thAugust, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/41.

(p) 9^thNovember, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/57.

(q) 24^thJanuary, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/68.

(r) 16^thMarch, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/75.

(a) 25^thJuly, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2022 vide  No. SEBI/LAD-NRO/GN/2022/89.

(b) 15^thNovember 2022, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/105.

(c) 9^thJanuary 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/113.

(d) 18^thJanuary 2023, by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/115.

(e) 7^thFebruary 2023, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/121.

(f) 15^thJune 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/132.

(g) 3^rdJuly 2023, by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/137.

(h) 17^thAugust 2023, by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide  No. SEBI/LAD-NRO/GN/ 2023/146.

(aa) 5^th January 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2024 vide  No. SEBI/LAD-NRO/GN/2024/163.

(bb) 25^th April 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/168.

(cc) 18^th July, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2024 vide  No. SEBI/LAD-NRO/GN/2024/194.

(dd) 6^th August, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/198.

(ee) 18^th November, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/209.

(ff) 10^th February, 2025, by the Securities and Exchange Board of India (Investor Charter) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/228.