Alternative Investment Funds

Information to be filed by schemes of Alternative Investment Funds

SEBI, vide circular dated July 9, 2024, has issued a clarification regarding the information to be filed by schemes of Alternative Investment Funds ("AIFs") availing dissolution period/additional liquidation period and conditions for in specie distribution of assets of AIFs. The clarification states that:

1. any scheme of an AIF entering dissolution period must file an information memorandum along with a due diligence certificate with SEBI through a merchant banker in the manner specified by SEBI (the formats for which are provided in the circular). The information memorandum must be submitted before the expiry of the liquidation period or additional liquidation period of the scheme, as the case may be;
2. schemes of AIFs that have expired or is expiring on or before July 24, 2024, may be granted an additional/fresh liquidation period, on submitting information to SEBI in the prescribed format; and
3. in specie distribution of investments of a scheme of an AIF must be carried out after obtaining approval of at least 75% of the investors by value of their investment in the scheme of the AIF.

Registration of migrated venture capital funds

SEBI, vide notification dated July 18, 2024, has issued the SEBI (AIF) (Third Amendment) Regulations, 2024. The key amendments are as follows:

• a venture capital fund may seek registration as migrated venture capital funds in terms of Chapter III-D, within 12 (twelve) months from July 18, 2024;
• SEBI may specify enhanced regulatory reporting and other measures for venture capital funds that do not seek registration as a migrated venture capital fund; and
• a new chapter (Chapter III-D), is inserted for migrated venture capital funds and schemes launched by such funds, providing:
  1. the procedure for grant of certificate;
  2. eligibility criteria;
  3. prohibition on inviting subscription from the public;
  4. issue of placement memorandum or subscription agreement; and
  5. conditions for investment by migrated venture capital fund.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.