SEBI AIF Regulations

THE GAZETTE OF INDIA
EXTRAORDINARY
PART – III – SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, MAY 21, 2012
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 21st May, 2012
SECURITIES AND EXCHANGE BOARD OF INDIA

(ALTERNATIVE INVESTMENT FUNDS) REGULATIONS, 2012
LAD-NRO/GN/2012-13/04/11262. — 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 Securities and Exchange Board of India hereby, makes the
following regulations, namely, —
CHAPTER – I
PRELIMINARY
Short title and commencement.
1. (1) These regulations shall be called the Securities and Exchange Board of India
(Alternative Investment Funds) Regulations, 2012.
(2) These regulations shall come into force on the date of their notification in the Official
Gazette.
Definitions.
2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall
bear the meanings assigned to them below, and their cognate expressions and variations
shall be construed accordingly,—
(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
1
[(aa) “accreditation agency” means a subsidiary of a recognized stock exchange or a
subsidiary of a depository or any other entity as may be specified by the Board
from time to time.
Explanation: For the purpose of this clause, the Board may recognize an
accreditation agency subject to such conditions as may be specified;
(ab) “accredited investor” means any person who is granted a certificate of

accreditation by an accreditation agency who,
(i) in case of an individual, Hindu Undivided Family, family trust or sole

proprietorship has:
(A) annual income of at least two crore rupees; or
(B) net worth of at least seven crore fifty lakh rupees, out of which not less
than three crores seventy-five lakh rupees is in the form of financial
assets; or
(C) annual income of at least one crore rupees and minimum net worth of
five crore rupees, out of which not less than two crore fifty lakh rupees
is in the form of financial assets.
(ii) in case of a body corporate, has net worth of at least fifty crore rupees;
(iii) in case of a trust other than family trust, has net worth of at least fifty crore
rupees;
(iv) in case of a partnership firm set up under the Indian Partnership Act, 1932,
each partner independently meets the eligibility criteria for accreditation:
Provided that the Central Government and the State Governments, developmental
agencies set up under the aegis of the Central Government or the State
Governments, funds set up by the Central Government or the State Governments,
qualified institutional buyers as defined under the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2018,
Category I foreign portfolio investors, sovereign wealth funds and multilateral
1
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment)
Regulations, 2021, w.e.f. 03-08-2021.
agencies and any other entity as may be specified by the Board from time to time,
shall deemed to be an accredited investor and may not be required to obtain a
certificate of accreditation;]
(b) “Alternative Investment Fund” means any fund established or incorporated in India
in the form of a trust or a company or a limited liability partnership or a body
corporate which,-
(i) is a privately pooled investment vehicle which collects funds from

investors, whether Indian or foreign, for investing it in accordance with a
defined investment policy for the benefit of its investors; and
(ii) is not covered under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996, Securities and Exchange Board of India
(Collective Investment Schemes) Regulations, 1999 or any other
regulations of the Board to regulate fund management activities:
Provided that the following shall not be considered as Alternative Investment

Fund for the purpose of these regulations,-
(i) family trusts set up for the benefit of ‘relatives’ as defined under
2
[Companies Act, 2013];
3
(ii) [ESOP Trusts set up under the Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014 or as permitted under
Companies Act, 2013;]
(iii) employee welfare trusts or gratuity trusts set up for the benefit of
employees;
(iv) 4
[’holding companies’ as defined under sub-section 46 of section 2 of
Companies Act, 2013;]
2
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “Companies Act, 1956”.
3
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “(ii) ESOP Trusts set up under the
Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme),
Guidelines, 1999 or as permitted under Companies Act, 1956;”
(v) other special purpose vehicles not established by fund managers, including
securitization trusts, regulated under a specific regulatory framework;
(vi) funds managed by securitisation company or reconstruction company

which is registered with the Reserve Bank of India under Section 3 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002; and
(vii) any such pool of funds which is directly regulated by any other regulator
in India;
(c) “associate” means a company or a limited liability partnership or a body corporate

in which a director or trustee or partner or Sponsor or Manager of the Alternative
Investment Fund or a director or partner of the Manager or Sponsor holds, either
individually or collectively, more than fifteen percent of its paid-up equity share
capital or partnership interest, as the case may be;
(d) “Board” means the Securities and Exchange Board of India established under
Section 3 of the Act;
(e) “certificate” means a certificate of registration granted by the Board under

regulation 6;
5
[(f) “Change in control” –
(i) in case of a body corporate –
4
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds)(Amendment)
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “holding companies’ within the meaning of
Section 4 of the Companies Act, 1956;”.
5
Substituted by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment)
Regulations, 2023 w.e.f. 17-1-2023. Prior to the substitution, clause (f) read as under:
““change in control” in relation to a company or a body corporate, means:
(i) if its shares are listed on any recognized stock exchange, change in control within the meaning of
clause (e) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(ii) in any other case, change in the controlling interest or change in legal form;
Explanation.─ For the purpose of sub-clause (ii), the expression “controlling interest” means an
interest, whether direct or indirect, to the extent of more than fifty percent of voting rights or
interest;”
(A) if its shares are listed on any recognised stock exchange, shall be construed
with reference to the definition of control in terms of regulations framed under
clause (h) of sub-section (2) of section 11 of the Act;
(B) if its shares are not listed on any recognised stock exchange, shall be construed
with reference to the definition of control as provided in sub-section (27) of Section
2 of the Companies Act, 2013 (18 of 2013);
(ii) in a case other than that of a body corporate, shall be construed as any change in its
legal formation or ownership or change in controlling interest.
Explanation – For the purpose of sub-clause (ii), the expression “controlling interest”
means an interest, direct or indirect, to the extent of not less than fifty percent of
voting rights or interest;]
6
[(fa) “Co-investment” means investment made by a Manager or Sponsor or investor of
Category I and II Alternative Investment Fund(s) in investee companies where
such Category I or Category II Alternative Investment Fund(s) make investment:
Provided that Co-investment by investors of Alternative Investment Fundshall be

through a Co-investment Portfolio Manager as specified under the Securities and
Exchange Board of India (Portfolio Managers) Regulations, 2020.]
(g) “company” means a company incorporated under the 7[Companies Act, 2013];
8
[(ga) “Corporate Debt Market Development Fund” means an Alternative Investment
Fund set up and making investments in terms of Chapter III-C of these regulations.]
(h) “corpus” means the total amount of funds committed by investors to the Alternative
Investment Fund by way of a written contract or any such document as on a
particular date;
9
[(ha) “credit default swaps” shall have the same meaning as assigned to it in the Master
Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022.]
6
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment)
Regulations, 2021 w.e.f 08-12-2021.
7
8
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment)
10 11
[ [(hb)] “custodian” means a person who has been granted a certificate of registration
to carry on the business of custodian under the Securities and Exchange Board of
India (Custodian) Regulations, 1996;]
12
[(i) “debt fund” means an Alternative Investment Fund which invests primarily in debt
securities of listed or unlisted investee companies or in securitized debt
instruments as per the stated objectives of the Fund;]
(j) “equity linked instruments” includes instruments convertible into equity shares or
share warrants, preference shares, debentures compulsorily or optionally
convertible into equity;
(k) “form” means any of the forms set out in the First Schedule;
13
[(ka) “goods” means the goods notified by the Central Government under clause (bc)
of section 2 of the Securities Contracts (Regulation) Act, 1956 and forming the
underlying of any commodity derivative;]
(l) “hedge fund” means an Alternative Investment Fund which employs diverse or
complex trading strategies and invests and trades in securities having diverse risks
or complex products including listed and unlisted derivatives;
(m) “infrastructure fund” means an Alternative Investment Fund which invests

primarily in unlisted securities or partnership interest or listed debt or securitized
debt instruments of investee companies or special purpose vehicles engaged in or
formed for the purpose of operating, developing or holding infrastructure
projects;
9 Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations,
2023, w.e.f 09-01-2023.
10
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2019, w.e.f. 10-05-2019.
11
Substituted for (“ha”) by the Securities and Exchange Board of India (Alternative Investment Funds)
(Amendment) Regulations, 2023, w.e.f 09-01-2023.
12
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment)
Regulations, 2018, w.e.f. 13-08-2021. Prior to the substitution, it read as-
“(i) “debt fund” means an Alternative Investment Fund which invests primarily in debt or debt securities of listed or
unlisted investee companies according to the stated objectives of the Fund;”
13
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds)(Amendment) Regulations,
2019, w.e.f. 10-05-2019.
Explanation.─ ‘Infrastructure’ shall be as defined by the government of India
from time to time.
(n) “inspecting authority” means any one or more person appointed by the Board to
exercise powers conferred under regulation 30;
(o) “investee company” means any company, special purpose vehicle or limited
14
liability partnership or body corporate [or real estate investment trust or
infrastructure investment trust] in which an Alternative Investment Fund makes
an investment;
15
[(p) “investable funds” means corpus of the scheme of Alternative Investment Fund net
of expenditure for administration and management of the fund estimated for the
tenure of the fund.
Explanation.─ For the purpose of this clause, the expression “tenure” means the
16 17
duration of scheme from the [date of first close] till [last date] of the term as
specified in the fund documents;]
18
[(pa) “large value fund for accredited investors” means an Alternative Investment Fund
or scheme of an Alternative Investment Fund in which each investor (other than
the Manager, Sponsor, employees or directors of the Alternative Investment Fund
or employees or directors of the Manager) is an accredited investor and invests not
less than seventy crore rupees;]
14
Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, w.e.f.
26-09-2014.
15
“(p) “investible funds” means corpus of the Alternative Investment Fund net of estimated expenditure for
administration and management of the fund;”
16
Regulations, 2022, w.e.f. 15-11-2022. Prior to the substitution, it read as “day of its launch”.
17
Regulations, 2022, w.e.f. 15-11-2022. Prior to the substitution, it read as “last day”.
18
Regulations, 2021, w.e.f. 03-08-2021.
19
[(pb) “liquidation period” means a period of one year following the expiry of tenure or
extended tenure of the scheme for fully liquidating the scheme of an Alternative
Investment Fund;
(pc) “liquidation scheme” means a close ended scheme launched by an Alternative

Investment Fund only for the purpose of liquidating the unliquidated investments
purchased from its scheme, whose tenure has expired.]
(q) “manager” means any person or entity who is appointed by the Alternative
Investment Fund to manage its investments by whatever name called and may
also be same as the sponsor of the Fund;
20
[(qa) “not for profit organization” shall have the same meaning as assigned to it in
clause (e) of regulation 292A of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2018;]
(r) “private equity fund” means an Alternative Investment Fund which invests
primarily in equity or equity linked instruments or partnership interests of
investee companies according to the stated objective of the fund;
(s) “SME” means Small and Medium Enterprise and shall have the same meaning as
assigned to it under the Micro, Small and Medium Enterprises Development Act
2006 as amended from time to time;
(t) “SME fund” means an Alternative Investment Fund which invests primarily in
unlisted securities of investee companies which are SMEs or securities of those
SMEs which are listed or proposed to be listed on a SME exchange or SME
segment of an exchange;
21
[(ta) “social enterprise” shall have the same meaning as assigned to it in clause (h) of
regulation 292A of the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2018;
19
20
Regulations, 2022, w.e.f. 25-07-2022.
(tb) “social impact fund” means an Alternative Investment Fund which invests
primarily in securities, units or partnership interest of social ventures or securities
of social enterprises and which satisfies the social performance norms laid down
by the fund;
(tc) “social stock exchange” shall have the same meaning as assigned to it in clause (i)
of regulation 292A of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2018;
(td) “social units” means units issued by a social impact fund or schemes of a social
impact fund to investors who have agreed to receive only social returns or
benefits and no financial returns against their contribution;]
(u) “social venture” means a trust, society or company or venture capital undertaking
or limited liability partnership formed with the purpose of promoting social
welfare or solving social problems or providing social benefits and includes,-
(i) public charitable trusts registered with Charity Commissioner;
(ii) societies registered for charitable purposes or for promotion of science,

literature, or fine arts;
22
(iii) [company registered under section 8 of the Companies Act, 2013;]
(iv) micro finance institutions;

23
(v) [***]
(w) “sponsor” means any person or persons who set up the Alternative Investment
Fund and includes promoter in case of a company and designated partner in case
of a limited liability partnership;
21
Regulations, 2022, w.e.f. 25-07-2022.
22
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “company registered under Section 25 of
the Companies Act, 1956”.
23
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment)
Regulations, 2022, w.e.f. 25-07-2022. Prior to its omission, clause (v) of sub-regulation (1) of regulation 2 read as
under:
“social venture fund” means an Alternative Investment Fund which invests primarily in securities or units
of social ventures and which satisfies social performance norms laid down by the fund and whose investors may
agree to receive restricted or muted returns;”
24
[(wa) “startup” means a private limited company or a limited liability partnership which
fulfills the criteria for startup as specified by the Department of Promotion of
Industry and Internal Trade, Ministry of Commerce and Industry, Government of
India, vide notification no. G.S.R. 127(E) dated February 19, 2019 or such other
policy of the Central Government issued in this regard from time to time;]
(x) “trust” means a trust established under the Indian Trusts Act, 1882 or under an
Act of Parliament or State Legislation;
25
[(y) “unit” means beneficial interest of the investors in the Alternative Investment
Fund or a scheme of the Alternative Investment Fund and may be fully or partly
paid up.
Explanation.─ For the purpose of this clause, partly paid up units shall represent
the portion of committed capital invested by the investor in Alternative
Investment Fund or scheme of the Alternative Investment Fund;]
(z) “venture capital fund” means an Alternative Investment Fund which invests
primarily in unlisted securities of start-ups, emerging or early-stage venture
capital undertakings mainly involved in new products, new services, technology
or intellectual property right based activities or a new business model 26[and shall
include an angel fund as defined under Chapter III-A];
27 28
[ [(za)] “venture capital undertaking” means a domestic company which is not listed on
a recognised stock exchange at the time of making investments;]
24
Regulations, 2021, w.e.f. 05-05-2021.
25
(z) “unit” means beneficial interest of the investors in the Alternative Investment Fund or a scheme of the
Alternative Investment Fund and shall include shares or partnership interests;
26
Regulations, 2013, w.e.f. 16-09-2013
27
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment)
Regulations, 2021, w.e.f. 05-05-2021. Prior to its substitution, clause (aa) read as under :
“(aa) “venture capital undertaking” means a domestic company:
(i) which is not listed on a recognised stock exchange in India at the time of making investment; and
(ii) which is engaged in the business for providing services, production or manufacture of article or things and
does not include following activities or sectors:
(1) non-banking financial companies;
(2) gold financing;
(2) All other expressions unless defined herein shall have the same meaning as have been
assigned to them under the Act or the Securities Contracts (Regulation) Act, 1956, (42
of 1956) or the 29[Companies Act, 2013 (18 of 2013)], or any statutory modification or
re-enactment thereto, as the case may be.
CHAPTER II
REGISTRATION OF ALTERNATIVE INVESTMENT FUNDS
Registration of Alternative Investment Funds.
3. (1) On and from the commencement of these regulations, no entity or person shall act as an
Alternative Investment Fund unless it has obtained a certificate of registration from the
Board:
Provided that an existing fund falling within the definition of Alternative Investment
Fund which is not registered with the Board may continue to operate for a period of six
months from commencement of these regulations or if it has made an application for
registration under sub-regulation (5) within the said period of six months, till the
disposal of such application:
Provided further that the Board may, in special cases, extend the said period up to a
maximum of twelve months from the date of such commencement:
Provided further that existing schemes will be allowed to complete their agreed tenure,
such funds shall not raise any fresh monies other than commitments already made till
registration is granted under regulation 6:
30[Provided further that such existing funds, which do not propose to accept any fresh
commitments after commencement of these regulations shall not be required to obtain
(3) activities not permitted under industrial policy of Government of India;

(4) any other activity which may be specified by the Board in consultation with Government of India from time
to time;”
28
Substituted for “(aa)” by the Securities and Exchange Board of India (Alternative Investment Funds) (Third
Amendment) Regulations, 2021, w.e.f. 03-08-2021.
29
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “Companies Act, 1956 (1 of 1956)”.
30
Regulations, 2013, w.e.f. 16-09-2013.
registration under these regulations subject to submission of information on their
activities to the Board in the manner as may be specified]
Provided further that if such existing funds are not able to comply with conditions
specified under these regulations, they may apply for exemption to the Board from strict
compliance with these regulations and the Board upon examination may provide such
exemptions or issue such instructions as may be deemed appropriate.
(2) The funds registered as venture capital fund under Securities and Exchange Board of
India (Venture Capital Funds) Regulations, 1996 shall continue to be regulated by the
said regulations till the existing fund or scheme managed by the fund is wound up and
such funds shall not launch any new scheme after notification of these regulations:
Provided that the existing fund or scheme shall not increase the targeted corpus of the
fund or scheme after notification of these regulations.
Provided further that venture capital funds may seek re-registration under these
regulations subject to approval of two-thirds of their investors by value of their
investment.
(3) Any entity referred to in sub-regulation (1) who fails to make an application for grant of a
certificate within the period specified therein shall cease to carry on any activity as an
Alternative Investment Fund.
(4) Alternative Investment Funds shall seek registration in one of the categories mentioned
hereunder and in case of Category I Alternative Investment Fund, in one of the sub-
categories thereof:
(a) “Category I Alternative Investment Fund” which invests in start-up or early

stage ventures or social ventures or SMEs or infrastructure or other sectors or
areas which the government or regulators consider as socially or economically
31
desirable and shall include venture capital funds, SME Funds, [social impact
31
Substituted for the words “social venture funds” by the Securities and Exchange Board of India (Alternative
Investment Funds) (Third Amendment) Regulations, 2022 w.e.f 25.07.2022.
32
funds], infrastructure funds [, special situation funds] and such other Alternative
Investment Funds as may be specified;
Explanation.─ For the purpose of this clause, Alternative Investment Funds

which are generally perceived to have positive spillover effects on economy and
for which the Board or Government of India or other regulators in India might
consider providing incentives or concessions shall be included and such funds
which are formed as trusts or companies shall be construed as “venture capital
company” or “venture capital fund” as specified under sub-section (23FB) of
Section 10 of the Income Tax Act, 1961.
(b) “Category II Alternative Investment Fund” which does not fall in Category I and
III and which does not undertake leverage or borrowing other than to meet day-to-
day operational requirements and as permitted in these regulations;
Explanation.─ For the purpose of this clause, Alternative Investment Funds such
as private equity funds or debt funds for which no specific incentives or
concessions are given by the government or any other Regulator shall be
included.
(c) “Category III Alternative Investment Fund” which employs diverse or complex
trading strategies and may employ leverage including through investment in listed
or unlisted derivatives.
Explanation.─ For the purpose of this clause, Alternative Investment Funds

such as hedge funds or funds which trade with a view to make short term returns
or such other funds which are open ended and for which no specific incentives or
concessions are given by the government or any other Regulator shall be
included.
33
(d) [specified Alternative Investment Fund under Regulation 19 of these
regulations.]
32
Regulations, 2022 w.e.f 24.01.2022.
33
(5) An application for grant of certificate shall be made for any of the categories as specified
in sub-regulation (4) in Form A as specified in the First Schedule to these regulations
and shall be accompanied by a non-refundable application fee as specified in Part A of
the Second Schedule to these regulations to be paid in the manner specified in Part B
thereof.
(6) The Board shall take into account requirements as specified in these regulations for the
purpose of considering grant of registration.
(7) Without prejudice to the powers of the Board to take any action under the Act or
regulations made there under, the certificate of registration shall be valid till the
Alternative Investment Fund is wound up.
(8) The Board may, in the interest of the investors, issue directions with regard to the transfer
of records, documents or securities or disposal of investments relating to its activities as
an Alternative Investment Fund.
(9) The Board may, in order to protect the interests of investors, appoint any person to take
charge of records, documents, securities and for this purpose, also determine the terms
and conditions of such an appointment.
Eligibility Criteria.
4. For the purpose of the grant of certificate to an applicant, the Board shall consider the
following conditions for eligibility, namely, —
(a) the memorandum of association in case of a company; or the Trust Deed in case
of a Trust; or the Partnership deed in case of a limited liability partnership permits
it to carry on the activity of an Alternative Investment Fund;
(b) the applicant is prohibited by its memorandum and articles of association or trust
deed or partnership deed from making an invitation to the public to subscribe to
its securities;
(c) in case the applicant is a Trust, the instrument of trust is in the form of a deed and
has been duly registered under the provisions of the Registration Act, 1908;
(d) in case the applicant is a limited liability partnership, the partnership is duly
incorporated and the partnership deed has been duly filed with the Registrar under
the provisions of the Limited Liability Partnership Act, 2008;
(e) in case the applicant is a body corporate, it is set up or established under the laws
of the Central or State Legislature and is permitted to carry on the activities of an
Alternative Investment Fund;
(f) the applicant, Sponsor and Manager are fit and proper persons based on the
criteria specified in Schedule II of the Securities and Exchange Board of India
(Intermediaries) Regulations, 2008;
34
(g) [The key investment team of the Manager of Alternative Investment Fund has -
35
(i) [at least one key personnel with relevant certification as may be
specified by the Board from time to time]; and
(ii) at least one key personnel with professional qualification in finance,
accountancy, business management, commerce, economics, capital
market or banking from a university or an institution recognized by
the Central Government or any State Government or a foreign
university, or a CFA charter from the CFA institute or any other
qualification as may be specified by the Board:
36
Provided that the requirements [***] as specified in regulation
4(g)(i) and 4(g)(ii) may also be fulfilled by the same key personnel.]
34
Substituted by Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations,
2020 w.e.f 19-10-2020. Prior to its substitution, clause (g) read as follows;
“(g) the key investment team of the Manager of Alternative Investment Fund has adequate experience, with at least
one key personnel having not less than five years experience in advising or managing pools of capital or in fund or
asset or wealth or portfolio management or in the business of buying, selling and dealing of securities or other
financial assets and has relevant professional qualification;”
35
Regulations, 2023 w.e.f such date as the Board may by notification in the Official Gazette appoint. Prior to its
substitution, sub-clause (i) read as follows:
“(i) adequate experience, with at least one key personnel having not less than five years of experience in advising or
managing pools of capital or in fund or asset or wealth or portfolio management or in the business of buying, selling
and dealing of securities or other financial assets;”
36
The words “of experience and professional qualification” omitted by the Securities and Exchange Board of India
(Alternative Investment Funds) (Second Amendment) Regulations, 2023 w.e.f such date as the Board may by
notification in the Official Gazette appoint.
37
[Provided further that a fresh certification shall be obtained before
expiry of the validity of the existing certification to ensure continuity
in compliance with the certification requirement.]
(h) the Manager or Sponsor has the necessary infrastructure and manpower to
effectively discharge its activities;
(i) the applicant has clearly described at the time of registration the investment
objective, the targeted investors, proposed corpus, investment style or strategy
and proposed tenure of the fund or scheme;
(j) whether the applicant or any entity established by the Sponsor or Manager has
earlier been refused registration by the Board.
Furnishing of Information.
5. (1) The Board may require the applicant to furnish any such further information or
clarification regarding the Sponsor or Manager or nature of the fund or fund
management activities or any such matter connected thereto to consider the application
for grant of a certificate or after registration thereon.
(2) If required by the Board, the applicant or Sponsor or Manager shall appear before the
Board for personal representation.
Procedure for grant of Certificate.
6. (1) The Board may grant certificate under any specific category of Alternative Investment
Fund, if it is satisfied that the applicant fulfills the requirements as specified in these
regulations.
(2) The Board shall, on receipt of the registration fee as specified in the Second Schedule,
grant a certificate of registration in Form B.
37
Regulations, 2023 w.e.f such date as the Board may by notification in the Official Gazette appoint.
(3) The registration may be granted with such conditions as may be deemed appropriate by
the Board.
38
[(4) The Board may, on being satisfied that the applicant complies with the provisions of
regulation 4 except those of clause (c) or clause (d) thereof, as the case may be, grant an in-
principle approval to the applicant:
Provided that the applicant shall comply with clause (c) or clause (d) of regulation 4, as
the case may be, within six months from the date of grant of in-principle approval and upon
compliance with the same, the Board may grant a certificate of registration under sub-
regulation (2).
(5) An Alternative Investment Fund that has been granted in-principle approval may accept
commitments from investors but shall not accept any monies till it is granted registration
under sub-regulation (2) of this regulation.]
Conditions of certificate.
7. (1) The certificate granted under regulation 6 shall, inter-alia, be subject to the following
conditions:-
(a) the Alternative Investment Fund shall abide by the provisions of the Act and these
regulations;
(b) the Alternative Investment Fund shall not carry on any other activity other than
permitted activities;
(c) the Alternative Investment Fund shall forthwith inform the Board in writing, if
any information or particulars previously submitted to the Board are found to be
false or misleading in any material particular or if there is any material change in
the information already submitted.
(2) An Alternative Investment Fund which has been granted registration under a particular
category cannot change its category subsequent to registration, except with the approval
of the Board.
38
Regulations, 2013, w.e.f. 16-09-2013
Procedure where registration is refused.
8. (1) After considering an application made under regulation 3, if the Board is of the opinion
that a certificate should not be granted, it may reject the application after giving the
applicant a reasonable opportunity of being heard.
(2) The decision of the Board to reject the application shall be communicated to the
applicant within thirty days.
(3) Where an application for a certificate is rejected by the Board, the applicant shall cease
to carry on any activity as an Alternative Investment Fund:
Provided that nothing contained in these regulations shall affect the liability of the
applicant towards its existing investors under law or agreement.
CHAPTER III
INVESTMENT CONDITIONS AND RESTRICTIONS
Investment Strategy.
9. (1) All Alternative Investment Funds shall state investment strategy, investment purpose
and its investment methodology in its placement memorandum to the investors.
(2) Any material alteration to the fund strategy shall be made with the consent of atleast
two-thirds of unit holders by value of their investment in the Alternative Investment
Fund.
Investment in Alternative Investment Fund.
10. Investment in all categories of Alternative Investment Funds shall be subject to the following
conditions:-
(a) the Alternative Investment Fund may raise funds from any investor whether Indian,
foreign or non-resident Indians by way of issue of units 39[:]
40
[Provided that a social impact fund or schemes of a social impact fund may also issue
social units;]
41
[(aa) The Alternative Investment Fund shall issue units in dematerialised form subject to the
conditions specified by the Board from time to time.]
(b) each scheme of the Alternative Investment Fund shall have corpus of at least twenty crore
rupees 42[:]
43
[Provided that each scheme of the social impact fund shall have a corpus of at least
five crore rupees;]
(c) the Alternative Investment Fund shall not accept from an investor, an investment of value
less than one crore rupees:
Provided that in case of investors who are employees or directors of the Alternative
Investment Fund or employees or directors of the Manager, the minimum value of
investment shall be twenty five lakh rupees 44[:]
45
[Provided further that this clause shall not apply to an accredited investor46[:]]
47
[Provided further that in case of a social impact fund which invests only in securities
of not for profit organizations registered or listed on a social stock exchange, the
minimum value of investment by an individual investor shall be two lakh rupees;]
39
Substituted for the symbol “;” by the Securities and Exchange Board of India (Alternative Investment Funds)
(Third Amendment) Regulations, 2022 w.e.f 25.07.2022.
40
41
42
43
44
Substituted for “.” by the Securities and Exchange Board of India (Alternative Investment Funds) (Third
45
Regulations, 2021, w.e.f. 03-08-2021.
46
(Third Amendment) Regulations, 2022, w.e.f 25.07.2022
(d) the Manager or Sponsor shall have a continuing interest in the Alternative Investment
Fund of not less than two and half percent of the corpus or five crore rupees, whichever
is lower, in the form of investment in the Alternative Investment Fund and such interest
shall not be through the waiver of management fees:
Provided that for Category III Alternative Investment Fund, the continuing interest shall
be not less than five percent of the corpus or ten crore rupees, whichever is lower.
(e) the Manager or Sponsor shall disclose their investment in the Alternative Investment
Fund to the investors of the Alternative Investment Fund;
(f) no scheme of the Alternative Investment Fund shall have more than one thousand
investors48[:]
49 50
[Provided that the provisions of the [Companies Act, 2013] shall apply to the
Alternative Investment Fund, if it is formed as a company.]
(g) the fund shall not solicit or collect funds except by way of private placement.
Placement Memorandum.
11. (1) Alternative Investment Fund shall raise funds through private placement by issue of
information memorandum or placement memorandum, by whatever name called.
(2) Such information or placement memorandum as specified in sub-regulation (1) shall

contain all material information about the Alternative Investment Fund and the Manager,
background of key investment team of the Manager, targeted investors, fees and all other
expenses proposed to be charged, tenure of the Alternative Investment Fund or scheme,
conditions or limits on redemption, investment strategy, risk management tools and
parameters employed, key service providers, 51
[terms of reference of the committee
constituted for approving the decisions of the Alternative Investment Fund,] conflict of
47
48
Regulations, 2013, w.e.f. 16-09-2013 for the symbol “;”
49
Regulations, 2013, w.e.f. 16-09-2013
50
51
Regulations, 2021, w.e.f. 05-05-2021.
interest and procedures to identify and address them, disciplinary history, the terms and
conditions on which the Manager offers investment services, its affiliations with other
intermediaries, manner of winding up of the Alternative Investment Fund or the scheme
and such other information as may be necessary for the investor to take an informed
decision on whether to invest in the Alternative Investment Fund.
Schemes.
12. (1) The Alternative Investment Fund may launch schemes subject to filing of placement
memorandum with the Board.
52
(2) Such placement memorandum shall be filed with the Board [through a merchant
banker] atleast thirty days prior to launch of scheme along with the fees as specified in
the Second Schedule:
Provided that payment of scheme fees shall not apply in case of launch of first scheme
by the Alternative Investment Fund.
53
[(3) The Board 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 scheme54[:]]
55
[Provided that the requirements under sub-regulation (2) and (3) shall not apply to large
value fund for accredited investors.]
56
[(4) The first close of the scheme shall be declared by an Alternative Investment Fund in
the manner as may be specified by the Board from time to time.
52
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment)
Regulations, 2018, w.e.f. 11-11-2021.
53
“(3) The Board may communicate its comments, if any, to the applicant prior to launch of the scheme and the
applicant shall incorporate the comments in placement memorandum prior to launch of scheme *[:]
**[Provided that the requirements under sub-regulation (2) and (3) shall not apply to large value fund for
accredited investors].”
* Substituted for “.” by the Securities and Exchange Board of India (Alternative Investment Funds) (Third
** Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment)
Regulations, 2021, w.e.f. 03-08-2021.
54
Substituted for “.” by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2022 w.e.f 24.01.2022
55
(5) Notwithstanding the proviso to sub-regulation (2), if the Alternative Investment Fund
fails to declare the first close of the scheme in the specified manner, it shall be required to
file a fresh application for launch of the scheme by paying the requisite scheme fee under
the Second Schedule.]
Tenure.
13. (1) Category I Alternative Investment Fund and Category II Alternative Investment Fund
shall be close ended and the tenure of fund or scheme shall be determined at the time of
application subject to sub-regulation (2) of this regulation.
(2) Category I and II Alternative Investment Fund or schemes launched by such funds shall
have a minimum tenure of three years.
57
(3) [Schemes of] Category III Alternative Investment Fund may be open ended or close
ended.
58
(4) [The manner of calculating the tenure of a close ended scheme of an Alternative
Investment Fund, including the manner of modification of the tenure, may be specified
by the Board from time to time.]
(5) Extension of the tenure of the close ended Alternative Investment Fund may be permitted
up to two years subject to approval of two-thirds of the unit holders by value of their
investment in the Alternative Investment Fund 59[:]
60
[Provided that large value funds for accredited investors may be permitted to extend its
tenure beyond two years, subject to terms of the contribution agreement, other fund
documents and such conditions as may be specified by the Board from time to time.]
61
(6) [In the absence of consent of unit holders under sub-regulation (5) or upon expiry of the
extended tenure, the Alternative Investment Fund or the scheme of the Alternative
56
Regulations, 2022, w.e.f. 15-11-2022.
57
Regulations, 2018, w.e.f. 13-08-2021.
58
Regulations, 2022, w.e.f. 15-11-2022.
59
Substituted for “.” by the Securities and Exchange Board of India (Alternative Investment Funds) (Third
60
Regulations, 2021, w.e.f. 03-08-2021.
Investment Fund shall be wound up in accordance with Regulation 29 of these
regulations.]
Listing.
14. (1) Units of close ended Alternative Investment Fund may be listed on stock exchange
subject to a minimum tradable lot of one crore rupees.
(2) Listing of Alternative Investment Fund units shall be permitted only after final close of
the fund or scheme.
General Investment Conditions.
15. (1) Investments by all categories of Alternative Investment Funds shall be subject to the
following conditions:-
(a) Alternative Investment Fund may invest in securities of companies incorporated

outside India subject to such conditions or guidelines that may be stipulated or
issued by the Reserve Bank of India and the Board from time to time;
62
[(b) The terms of Co-investment in an investee company by a Manager or
Sponsor or co-investor, shall not be more favourable than the terms of
investment of the Alternative Investment Fund:
Provided that the terms of exit from the Co-investment in an investee company
including the timing of exit shall be identical to the terms applicable to that of
exit of the Alternative Investment Fund:
61
Regulations, 2023 w.e.f 15-06-2023. Prior to its substitution, sub-regulation (6) read as follows:
“(6) In the absence of consent of unit holders, the Alternative Investment Fund shall fully liquidate within one year
following expiration of the fund tenure or extended tenure.”
62
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment)
Regulations, 2021 w.e.f 08-12-2021. Prior to its substitution, clause (b) read as follows:
(b) Co-investment in an investee company by a Manager or Sponsor shall not be on terms more favourable than
those offered to the Alternative Investment Fund;
Provided further that the above proviso shall be applicable only for co-investment
made from the date of coming into force of this regulation;]
63
[(c) Category I and II of Alternative Investment Funds shall invest not more than twenty
five per cent of the investable funds in an Investee Company directly or through
investment in the units of other Alternative Investment Funds 64[:]
65
[Provided that large value funds for accredited investors of Category I and II may
invest up to fifty percent of the investable funds in an investee company directly or
through investment in the units of other Alternative Investment Funds;]
66
[(d) Category III Alternative Investment Funds shall invest not more than ten per cent of
the investable funds in an Investee Company, directly or through investment in units
of other Alternative Investment Funds and the large value funds for accredited
investors of Category III Alternative Investment Funds may invest up to twenty per
63
Regulations, 2021, w.e.f. 05-05-2021. Prior to its substitution clauses (c) and (d) read as under:
“(c) Category I and II Alternative Investment Funds shall invest not more than twenty five percent of the
*[investable funds] in one Investee Company;
(d) Category III Alternative Investment Fund shall invest not more than ten percent of the *[investable funds]
in one Investee Company”
* Substituted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment)
Regulations, 2013, w.e.f. 16-09-2013 for the word “corpus”.
64
Substituted for “.” by the Securities and Exchange Board of India Securities and Exchange Board of India
(Alternative Investment Funds) (Third Amendment) Regulations, 2021, w.e.f. 03-08-2021.
65
Regulations, 2021, w.e.f. 03-08-2021.
66
Regulations, 2022, w.e.f. 16-03-2022. Prior to its substitution clause (d) read as under –
“*[(d) Category III Alternative Investment Funds shall invest not more than ten per cent of the net asset
value in listed equity of an Investee Company and shall invest not more than ten per cent of the investable
funds in securities other than listed equity of an Investee Company, directly or through investment in units of
other Alternative Investment Funds:
Provided that large value funds for accredited investors of Category III Alternative Investment Funds may
invest up to twenty per cent of the net asset value in listed equity of an Investee Company and may invest up to
twenty per cent of the investable funds in securities other than listed equity of an Investee Company, directly or
through investment in units of other Alternative Investment Funds;”
*Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment)
Regulations, 2021 w.e.f 09-11-2021. Prior to its substitution clause (d) read as under –
“(d) Category III of Alternative Investment Funds shall invest not more than ten per cent of the investable funds in
an Investee Company directly or through investment in units of other Alternative Investment Funds:
Provided that large value funds for accredited investors of Category III may invest up to twenty percent of
the investable funds in an investee company directly or through investment in units of other Alternative
Investment Funds;”
cent of the investable funds in an Investee Company, directly or through investment
in units of other Alternative Investment Funds:
Provided that for investment in listed equity of an Investee Company, Category III
Alternative Investment Funds may calculate the investment limit of ten per cent of
either the investable funds or the net asset value of the scheme and large value funds
for accredited investors of Category III Alternative Investment Funds may calculate
the investment limit of twenty per cent of either the investable funds or the net asset
value of the scheme, subject to the conditions specified by the Board from time to
time;]
67
[(da) Alternative Investment Funds which are authorised under the fund documents to
invest in units of Alternative Investment Funds shall not offer their units for
subscription to other Alternative Investment Funds;]
68
[(e) Alternative Investment Fund shall not invest except with the approval of seventy five
percent of investors by value of their investment in the Alternative Investment Fund
in -
(a) associates; or
(b) units of Alternative Investment Funds managed or sponsored by its Manager,

Sponsor or associates of its Manager or Sponsor;]
69
[(ea) Except with the approval of seventy five percent of the investors by value of
their investment in the scheme of Alternative Investment Fund and subject to the
conditions specified by the Board, a scheme of an Alternative Investment Fund shall
not buy or sell investments, from or to -
(a) associates; or
67
Regulations, 2021, w.e.f. 05-05-2021.
68
Regulations, 2021, w.e.f. 05-05-2021. Prior to its substitution clauses (e) read as under –
“(e) Alternative Investment Fund shall not invest in associates except with the approval of seventy five percent of
investors by value of their investment in the Alternative Investment Fund;”
69
(b) schemes of Alternative Investment Funds managed or sponsored by its
Manager, Sponsor or associates of its Manager or Sponsor; or
(c) an investor who has committed to invest at least fifty percent of the corpus of the
scheme of Alternative Investment Fund:
Provided that while obtaining approval of the investors, the investor specified under
sub-clause (c) who has committed to invest at least fifty percent of the corpus of the
scheme of Alternative Investment Fund and is buying or selling the investment, from
or to, the Alternative Investment Fund, shall be excluded from the voting process.]
70
[(f) Un-invested portion of the investable funds and divestment proceeds pending
distribution to investors may be invested in liquid mutual funds or bank deposits or
other liquid assets of higher quality such as Treasury bills, Triparty Repo Dealing
and Settlement, Commercial Papers, Certificates of Deposits, etc. till the deployment
of funds as per the investment objective or the distribution of the funds to investors
as per the terms of the fund documents, as applicable;]
(g) Alternative Investment Fund may act as Nominated Investor as specified in clause (b)
of sub-regulation (1) of regulation 106N of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
71
[(h) Investment by Category I and Category II Alternative Investment Funds in the shares
of entities listed on institutional trading platform after the commencement of
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) (Fourth Amendment) Regulations, 2015 shall be deemed to be
investment in ‘unlisted securities’ for the purpose of these regulations.]
70
“(f) Un-invested portion of the *[investable funds] may be invested in liquid mutual funds or bank deposits or other
liquid assets of higher quality such as Treasury bills, CBLOs, Commercial Papers, Certificates of Deposits, etc. till
deployment of funds as per the investment objective;”
Regulations, 2013, w.e.f. 16-09-2013 for the word “corpus”.
71
Inserted by Securities and Exchange Board of India (Alternative Investment Fund) (Amendment) Regulations,
2015, w.e.f. 14.08.2015
(2) Notwithstanding the conditions as specified in sub-regulation (1), the Board may specify
additional requirements or criteria for Alternative Investment Funds or for a specific
category thereof.
Conditions for Category I Alternative Investment Funds.
16. (1) The following investment conditions shall apply to all Category I Alternative Investment
Funds:-
72
[(a) Category I Alternative Investment Fund shall invest in investee companies,
venture capital undertakings, special purpose vehicles, limited liability partnerships 73[,]
in units of other Category I Alternative Investment Funds of the same sub category 74[,
or in units of Category II Alternative Investment Funds as specified in this regulation]];
75
[(aa) Category I Alternative Investment Funds may engage in hedging, including
credit default swaps in terms of the conditions as may be specified by the Board from
time to time.]
(b) 76[***](c) Category I Alternative Investment Funds shall not borrow funds directly or
indirectly or engage in any leverage except for meeting temporary funding requirements
for not more than thirty days, on not more than four occasions in a year and not more
than ten percent of the 77[investable funds].
72
Regulations, 2021, w.e.f. 05-05-2021. Prior to its substitution, clause (a) read as follows -
“(a) Category I Alternative Investment Fund shall invest in investee companies or venture capital undertaking or in
special purpose vehicles or in limited liability partnerships or in units of other Alternative Investment Funds as
specified in these regulations;”
73
Substituted for the word “or” by the Securities and Exchange Board of India (Alternative Investment Funds)
(Fourth Amendment) Regulations, 2018, w.e.f. 13-08-2021.
74
Regulations, 2018, w.e.f. 13-08-2021.
75 Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2023, w.e.f 09-01-2023.

76
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment)
Regulations, 2021, w.e.f. 05-05-2021. Prior to its omission clause (b) read as follows:
(b) Fund of Category I Alternative Investment Funds may invest in units of Category I Alternative Investment
Funds of same sub-category:
Provided that they shall only invest in such units and shall not invest in units of other Fund of Funds:
Provided further that the investment conditions as specified in sub-regulations (2), (3), (4) or (5) shall not be
applicable to investments by such funds.
77
Substituted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment)
Regulations, 2013, w.e..f 16-09-2013 for the word “corpus”
(2) The following investment conditions shall apply to venture capital funds in addition to
conditions laid down in sub-regulation (1):-
78
[(a) at least seventy-five percent of the investable funds shall be invested in unlisted
equity shares or equity linked instruments of a venture capital undertaking or in
companies listed or proposed to be listed on a SME exchange or SME segment of an
exchange:
Provided that the investment conditions specified in clause (a) shall be achieved by
the fund by the end of its life cycle.]
79
(b) [***]
(c) such funds may enter into an agreement with merchant banker to subscribe to the
unsubscribed portion of the issue or to receive or deliver securities in the process of
80
market making under [Chapter IX of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the
78
“(a) at least two-thirds of the *[investable funds] shall be invested in unlisted equity shares or equity linked
instruments of a venture capital undertaking or in companies listed or proposed to be listed on a SME exchange or
SME segment of an exchange;”
Regulations, 2013, w.e.f 16-09-2013 for the word “corpus”
79
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment)
Regulations, 2018, w.e.f. 13-08-2021. Prior to the omission, it read as-
“(b) not more than one-third of the *[investable funds] shall be invested in:
(i) subscription to initial public offer of a venture capital undertaking whose shares are proposed to be listed;
(ii) debt or debt instrument of a venture capital undertaking in which the fund has already made an investment by
way of equity or contribution towards partnership interest;
(iii) preferential allotment, including through qualified institutional placement, of equity shares or equity linked
instruments of a listed company subject to lock in period of one year;
(iv) the equity shares or equity linked instruments of a financially weak company or a sick industrial company whose
shares are listed.
Explanation.– For the purpose of these regulations, “a financially weak company” means a company, which has at
the end of the previous financial year accumulated losses, which has resulted in erosion of more than fifty percent
but less than hundred percent of its net worth as at the beginning of the previous financial year.
(v) special purpose vehicles which are created by the fund for the purpose of facilitating or promoting investment in
accordance with these regulations:
Provided that the investment conditions and restrictions stipulated in clause (a) and clause (b) of sub-regulation (2)
shall be achieved by the fund by the end of its life cycle.”
Regulations, 2013, w.e.f 16-09-2013 for the word “corpus”
80
Substituted for “Chapter XB of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 and the provisions of clause (a) and clause (b) of sub-regulation (2)” by the
Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2018,
w.e.f. 13-08-2021.
provisions of clause (a) of sub- regulation (2)] shall not apply in case of acquisition
or sale of securities pursuant to such subscription or market making.
81
[(d) such funds shall be exempt from sub-regulations (1) and (2) of regulation 3 and sub-
regulation (1) of regulation 4 of the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015 in respect of investment in
companies listed on the SME exchange or SME segment of an exchange pursuant to
due diligence of such companies subject to the following conditions:
(i) the fund shall disclose any trading in securities pursuant to such due-
diligence, within two trading days of such trading, to the stock exchanges
where the investee company is listed;
(ii) such investment shall be locked in for a period of one year from the date of
investment.]
(3) The following conditions shall apply to SME Funds in addition to conditions laid down in
sub-regulation (1):-
82
(a) atleast seventy five percent of the [investable funds] shall be invested in unlisted
securities or partnership interest of venture capital undertakings or investee
companies which are SMEs or in companies listed or proposed to be listed on SME
83
exchange or SME segment of an exchange [or in units of Category II Alternative
Investment Funds which invest primarily in such venture capital undertakings or
investee companies];
(b) such funds may enter into an agreement with merchant banker to subscribe to the
unsubscribed portion of the issue or to receive or deliver securities in the process of
81
“(d) such funds shall be exempt from regulation 3 and 3A of Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 1992 in respect of investment in companies listed on SME Exchange or SME segment
of an exchange pursuant to due diligence of such companies subject to the following conditions:
(i) the fund shall disclose any acquisition or dealing in securities pursuant to such due-diligence, within two
working days of such acquisition or dealing, to the stock exchanges where the investee company is listed;
(ii) such investment shall be locked in for a period of one year from the date of investment.”
82
83
Regulations, 2018, w.e.f. 13-08-2021.
84
market making under [Chapter IX of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2018];
85
[(c) such funds shall be exempt from sub-regulations (1) and (2) of regulation 3 and
sub-regulation (1) of regulation 4 of the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015 in respect of investment in
companies listed on the SME exchange or SME segment of an exchange pursuant to
due diligence of such companies subject to the following conditions:
(i) the fund shall disclose any trading in securities pursuant to such due-diligence,
within two trading days of such trading, to the stock exchanges where the
investee company is listed;
investment.]
86
(4) The following conditions shall apply to social [impact] funds in addition to the
conditions laid down in sub-regulation (1):-
87
(a) [at least seventy-five percent of the investable funds shall be invested in unlisted
securities or partnership interest of social ventures or in units of social ventures or in
securities of social enterprises:
84
Requirements) Regulations, 2009” by the Securities and Exchange Board of India (Alternative Investment Funds)
85
“(c) such funds shall be exempt from regulation 3 and 3A of Securities and Exchange Board of India (Prohibition
of Insider Trading) Regulations, 1992 in respect of investment in companies listed on SME Exchange or SME
segment of an exchange pursuant to due diligence of such companies subject to the following conditions:
86
Substituted for the word “venture” by the Securities and Exchange Board of India (Alternative Investment Funds)
87
Substituted by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment)
Regulations, 2022 w.e.f 25.07.2022. Prior to the substitution, clause (a) of sub-regulation (4) of regulation 16 read as
under:
“atleast seventy five percent of the *[investable funds] shall be invested in unlisted securities or partnership interest
of social ventures.”
* Substituted for “corpus” by the Securities and Exchange Board of India (Alternative Investment Funds)
(Amendment) Regulations, 2013, w.e.f. 16-9-2013.
Provided that an existing social impact fund may invest the remaining investable
funds in securities of not for profit organizations registered or listed on a social stock
exchange with the prior consent of atleast 75% of the investors by value of their
investment;]
(b) such funds may accept grants, provided that such utilization of such grants shall be
restricted to clause (a) 88[:]
89[Provided
that the amount of grant that may be accepted by the fund from any
person shall not be less than 90[ten lakh rupees]:
91
[Provided further that the minimum amount of grant shall not apply to accredited
investors:]
Provided further that no profits or gains shall accrue to the provider of such
grants.]
92
[(ba) Notwithstanding the provisions of clauses (a) and (b), a social impact fund or
schemes of a social impact fund launched exclusively for a not for profit organization
registered or listed on a social stock exchange, shall be permitted to deploy or invest
hundred percent of the investable funds in the securities of not for profit organizations
registered or listed on a social stock exchange.]
(c) such funds may give grants to social ventures 93[or social enterprises], provided that
appropriate disclosure is made in the placement memorandum.
94
(d) [***]
88
Regulations, 2013, w.e..f 16-09-2013 for the symbol “.”
89
Inserted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment) Regulations,
2013, w.e..f 16-09-2013
90
Substituted for the words “twenty five lakh rupees” by the Securities and Exchange Board of India (Alternative
Investment Funds) (Third Amendment) Regulations, 2022 w.e.f 25.07.2022.
91
Regulations, 2018, w.e.f. 13-08-2021.
92
93
94
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment)
Regulations, 2022 w.e.f 25.07.2022. Prior to its omission, clause (d) of sub-regulation (4) of regulation 16 read as
under:
“such funds may accept muted returns for their investors i.e. they may accept returns on their investments which
may be lower than prevailing returns for similar investments.”
(5) The following conditions shall apply to Infrastructure Funds in addition to conditions laid
down in sub-regulation (1):-
(a) atleast seventy five percent of the 95[investable funds] shall

be invested in unlisted securities or units or partnership interest of venture capital
undertaking or investee companies or special purpose vehicles, which are engaged in
or formed for the purpose of operating, developing or holding infrastructure projects
96
[or in units of Category II Alternative Investment Funds which invest primarily in
such venture capital undertakings or investee companies or special purpose
vehicles];
(b) notwithstanding clause (a) of sub-regulation (5), such funds may also invest in listed
securitized debt instruments or listed debt securities of investee companies or special
purpose vehicles, which are engaged in or formed for the purpose of operating,
developing or holding infrastructure projects.
Conditions for Category II Alternative Investment Funds.
17. The following investment conditions shall apply to Category II Alternative Investment
Funds:-
97
[(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
companies directly or through investment in units of other Alternative Investment Funds;]
(b) 98[***]
95
96
Regulations, 2018, w.e.f. 13-08-2021.
97
“(a) Category II Alternative Investment Funds shall invest primarily in unlisted investee companies or in units of
other Alternative Investment Funds as may be specified in the placement memorandum;”
98
Regulations, 2021, w.e.f. 05-05-2021. Prior to its omission, clause (b) read as follows -
(c) Category II Alternative Investment Funds may not borrow funds directly or indirectly and
shall not engage in leverage except for meeting temporary funding requirements for not
more than thirty days, not more than four occasions in a year and not more than ten
percent of the 99[investable funds];
(d) Notwithstanding clause (c), Category II Alternative Investment Funds may engage in
hedging, subject to guidelines as specified by the Board from time to time;
100
[(da) Category II Alternative Investment Funds may buy or sell credit default swaps in
terms of the conditions as may be specified by the Board from time to time.]
(e) Category II Alternative Investment Funds may enter into an agreement with merchant
banker to subscribe to the unsubscribed portion of the issue or to receive or deliver
101
securities in the process of market making under [Chapter IX of the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2018].
102
[(f) Category II Alternative Investment Funds shall be exempt from sub-regulations (1) and
(2) of regulation 3 and sub-regulation (1) of regulation 4 of the Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 2015 in respect of
investment in companies listed on the SME exchange or SME segment of an exchange
pursuant to due diligence of such companies subject to the following conditions:
“(b) Fund of Category II Alternative Investment Funds may invest in units of Category I or Category II Alternative
Investment Funds:
Provided that they shall only invest in such units and shall not invest in units of other Fund of Funds.”
99
Regulations, 2013, w.e.f. 16-09-2013 for the word “corpus”
100
Regulations, 2023, w.e.f 09-01-2023.
101
Requirements) Regulations, 2009” by the Securities and Exchange Board of India (Alternative Investment Funds)
102
“(c) Category II Alternative Investment Funds shall be exempt from regulation 3 and 3A of Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 1992 in respect of investment in companies listed on
SME Exchange or SME segment of an exchange pursuant to due diligence of such companies subject to the
following conditions:
(i) the fund shall disclose any trading in securities pursuant to such due-diligence,
within two trading days of such trading, to the stock exchanges where the investee
company is listed;
investment.]
Conditions for Category III Alternative Investment Funds.
18. The following investment conditions shall apply to Category III Alternative Investment
Funds:-
103
[(a) Category III Alternative Investment Funds may invest in securities of listed or unlisted
investee companies, derivatives, units of other Alternative Investment Funds or complex or
structured products;]
104
[(aa) Category III Alternative Investment Funds may deal in goods received in delivery
against physical settlement of commodity derivatives;]
105
[(ab) Category III Alternative Investment Funds may buy or sell credit default swaps in
terms of the conditions as may be specified by the Board from time to time.]
(b) 106[***]
(c) Category III Alternative Investment Funds may engage in leverage or borrow subject to
consent from the investors in the fund and subject to a maximum limit, as may be
specified by the Board:
103
“(a) Category III Alternative Investment Funds may invest in securities of listed or unlisted investee companies or
derivatives or complex or structured products;”
104
Inserted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment)
Regulations, 2019, w.e.f 10-05-2019.
Regulations, 2023, w.e.f 09-01-2023.

106
Regulations, 2021, w.e.f. 05-05-2021. Prior to its omission, clause (b) read as follows -
“(b) *[Fund of Category III] Alternative Investment Funds may invest in units of Category I or Category II
Alternative Investment Funds:
Provided that they invest solely in such units and shall not invest in units of other Fund of Funds”
*Substituted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment)
Regulations, 2013, w.e..f 16-09-2013 for the words and symbol “Fund of Category II”.
Provided that such funds shall disclose information regarding the overall level of
leverage employed, the level of leverage arising from borrowing of cash, the level of
leverage arising from position held in derivatives or in any complex product and the main
source of leverage in their fund to the investors and to the Board periodically, as may be
specified by the Board.
(d) Category III Alternative Investment Funds shall be regulated through issuance of
directions regarding areas such as operational standards, conduct of business rules,
prudential requirements, restrictions on redemption and conflict of interest as may be
specified by the Board.
Other Alternative Investment Fund.
19. The Board may lay down framework for Alternative Investment Funds other than the Funds
falling in the categories specified in these regulations.
107[CHAPTER III -A
ANGEL FUNDS
Definitions.
19A. For the purposes of this Chapter, unless the context otherwise requires, the terms defined
herein shall bear the meanings assigned to them below, and their cognate expressions and
variations shall be construed accordingly,-
(1) “angel fund” means a sub-category of Venture Capital Fund under Category I- Alternative
Investment Fund that raises funds from angel investors and invests in accordance with the
provisions of this Chapter.
(2) "angel investor" means any person who proposes to invest in an angel fund and satisfies one
of the following conditions, namely,
107
Inserted by the Securities and Exchange Board of India (Alternative Investment Fund) (Amendment)
Regulations, 2013, w.e..f 16-09-2013
(a) an individual investor who has net tangible assets of at least two crore rupees excluding value
of his principal residence, and who:
(i) has early stage investment experience, or
(ii) has experience as a serial entrepreneur, or
(iii) is a senior management professional with at least ten years of experience;
Explanation: For the purpose of this clause, 'early stage investment experience' shall
mean prior experience in investing in start-up or emerging or early-stage ventures and
'serial entrepreneur' shall mean a person who has promoted or co-promoted more than
one start-up venture.
(b) a body corporate with a net worth of at least ten crore rupees; or
(c) an Alternative Investment Fund registered under these regulations or a Venture Capital Fund
registered under the SEBI (Venture Capital Funds) Regulations, 1996.
(3) "company with family connection" means:
a. if the angel investor is an individual,
i. any company which is promoted by such an individual or his relative; or
ii. any company where the individual or his relative is a director; or
iii. any company where the person or his relative has control, or shares or voting rights
which entitle them to fifteen percent or more of the shares or voting rights in the
company.
Explanation I: For the purpose of this clause, "relative" means a person as defined under
108
[ sub-section 77 of section 2 of the Companies Act, 2013].
Explanation II: For the purpose of this clause, "control" shall have the same meaning as
assigned to it under sub-regulation (1) of regulation 2 of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
b. if the angel investor is a body corporate,
108
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “section 6 of the Companies Act, 1956 (1
of 1956)”.
i. any company which is a subsidiary or a holding company of the investor;
or
ii. any company which is part of the same group or under the same management of the
investor; or
Explanation: For the purpose of this clause, "part of the same group" and "under the same
management" shall have the same meaning as assigned to it under regulation 23 of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009.
iii. any company where the body corporate or its directors/partners have control, or shares
or voting rights which entitle them to fifteen percent or more of the shares or voting
rights in the company.
Explanation: For the purpose of this clause, "control" shall have the same meaning as
assigned to it under sub-regulation (1) of regulation 2 of the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
Applicability.
19B. (1) The provisions of this Chapter shall apply to angel funds and schemes launched by such
angel funds.
(2) All other provisions of these regulations, except clauses (a), (b), (c), (d) and (f) of regulation
10, regulation 12, regulation 14, clauses (a), (c) and (e) of sub-regulation (1) of regulation 15,
clause (b) of sub-regulation (1) of regulation 16 and sub-regulation (2) of regulation 16, and the
guidelines and circulars issued under these regulations, unless the context otherwise requires or
repugnant to the provisions of this Chapter, shall apply to angel funds, their sponsors and
managers and angel investors.
Registration of angel funds.
19C. (1) An applicant may apply for registration as an angel fund in accordance with the
provisions of Chapter II of these Regulations.
(2) An Alternative Investment Fund already registered under these regulations, which has not
made any investments, may apply for conversion of its category into an angel fund under the
provisions of this Chapter and the provisions of Chapter II shall apply as they apply to a fresh
registration.
Investment in angel funds.
19D. (1) Angel funds shall only raise funds by way of issue of units to angel investors.
(2) An angel fund shall have a corpus of at least 109[five] crore rupees.
(3) Angel funds shall accept, up to a maximum period of 110[five] years, an investment of not less
than twenty five lakh rupees from an angel investor.
(4) Angel fund shall raise funds through private placement by issue of information memorandum
or placement memorandum, by whatever name called.
111
[Provided that the provisions of the Companies Act, 2013 shall apply to the Angel Fund,
if it is formed as a company.]
Schemes.
19E. 112[(1) The angel fund may launch schemes subject to filing of a term sheet with the Board,
containing material information regarding the scheme, in the format and time period as may be
specified by the Board.]
113
[***]
114
[***]
109
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “ten”.
110
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “three”.
111
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds)(Amendment)
Regulations, 2018, w.e.f. 01-06-2018.
112
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “The angel fund may launch schemes
subject to filing of a scheme memorandum at least ten working days prior to launch of the scheme with the Board:
Provided that payment of scheme fees shall not apply to schemes launched by angel funds.”.
113
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds)(Amendment)
Regulations, 2018, w.e.f. 01-06-2018. Prior to the omission, it read as “(2) Such scheme memorandum shall contain
all material information about the investments proposed under such scheme.”
114
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds)(Amendment)
Regulations, 2018, w.e.f. 01-06-2018. Prior to the omission, it read as “(3) The Board may communicate its
115
[(2)] No scheme of the angel fund shall have more than 116[two hundred] angel investors.
117
[Provided that the provisions of the Companies Act, 2013 shall apply to the Angel Fund,
if it is formed as a company.]
Investment by Angel Funds.
19F. (1) Angel funds shall invest 118[***] in 119[ startups]120[***] which:
(a) 121[***]
(b) 122[***]
(c) are not promoted or sponsored by or related to an industrial group whose group
turnover exceeds three hundred crore rupees; and
Explanation I: For the purpose of this clause, "industrial group" shall include a group of
body corporates with the same promoter(s)/promoter group, a parent company and its
subsidiaries, a group of body corporates in which the same person/ group of persons
exercise control, and a group of body corporates comprised of associates/ subsidiaries/
holding companies.
comments, if any, to the applicant prior to launch of the Scheme and the applicant shall incorporate the comments in
the scheme memorandum prior to launch of the scheme.”
115
Regulations, 2018, w.e.f. 01-06-2018. Prior to the substitution, it read as “(4)”
116
Substituted for the words “forty nine” by the Securities and Exchange Board of India (Alternative Investment
Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.
117
Regulations, 2018, w.e.f. 01-06-2018.
118
The word “only” was omitted by the Securities and Exchange Board of India (Alternative Investment Funds)
119
Regulations, 2021, w.e.f. 05-05-2021.
120
The word “venture capital undertakings” was omitted by the Securities and Exchange Board of India (Alternative
Investment Funds) (Second Amendment) Regulations, 2021, w.e.f. 05-05-2021.
121
Regulations, 2021, w.e.f. 05-05-2021. Prior to its omission, clause (a) read as under-
“*[(a) complies with the criteria regarding the age of the venture capital undertaking/startup issued by the
Department of Industrial Policy and Promotion under the Ministry of Commerce and Industry, Government of India
vide notification no. G.S.R. 180(E) dated February 17, 2016 or such other policy made in this regard which may be
in force;]
*Substituted for the words “have been incorporated during the preceding three years from the date of such
investment;” by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2016, w.e.f. 04-01-2017.”
122
Regulations, 2021, w.e.f. 05-05-2021. Prior to its omission, clause (b) read as under-
“(b) have a turnover of less than twenty five crore rupees;”
Explanation II: For the purpose of this clause, "group turnover" shall mean combined
total revenue of the industrial group.
(d) are not companies with family connection with any of the angel investors who are
investing in the company.
(2) Investment by an angel fund in any venture capital undertaking shall not be less than
123
[twenty five] lakh rupees and shall not exceed 124[ten crores] rupees.
(3) Investment by an angel fund in the venture capital undertaking shall be locked-in for a
period of 125[one year].
(4) Angel funds shall not invest in associates.
(5) Angel funds shall not invest more than twenty-five per cent of the total investments under
all its schemes in one venture capital undertaking:
Provided that the compliance to this sub-regulation shall be ensured by the Angel Fund at
the end of its tenure.

126
[(6) An angel fund may also invest in the securities of companies incorporated outside India
subject to such conditions or guidelines that may be stipulated or issued by the Reserve Bank of
India and the Board from time to time.]
Obligations of Sponsors and Managers of Angel Fund.
19G. (1) The sponsor shall ensure that the angel investors satisfy the conditions specified in sub-
regulation (2) of regulation 19A.
(2) The manager or sponsor shall have a continuing interest in the angel fund of not less than two
and half percent of the corpus or fifty lakh rupees, whichever is lesser, and such interest shall not
be through the waiver of management fees.
123
Substituted for the words “fifty;” by the Securities and Exchange Board of India (Alternative Investment Funds)
124
Regulations, 2018, w.e.f. 01-06-2018. Prior to its substitution, it read as “five crores”.
125
Substituted for the words “three years;” by the Securities and Exchange Board of India (Alternative Investment
Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.
126
Regulations, 2016, w.e.f. 04-01-2017.
(3) The manager of the angel fund shall obtain an undertaking from every angel investor
proposing to make investment in a venture capital undertaking, confirming his approval for such
an investment, prior to making such an investment.
Prohibition of Listing.
19H. Units of angel funds shall not be listed on any recognised stock exchange.]
127[CHAPTER III -B
SPECIAL SITUATION FUNDS
Definitions.
19I. For the purposes of this Chapter, unless the context otherwise requires, the terms defined
herein shall bear the meanings assigned to them below and their cognate expressions and
variations shall be construed accordingly,-
(1) “resolution applicant” shall have the same meaning as assigned to it under the Insolvency and
Bankruptcy Code, 2016;
(2) “special situation asset” includes,-
(a) stressed loan available for acquisition in terms of Clause 58 of Master Direction –
Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 as amended from time
to time or as part of a resolution plan approved under the Insolvency and Bankruptcy Code,
2016 or in terms of any other policy of the Reserve Bank of India or Government of India
issued in this regard from time to time;
(b) security receipts issued by an Asset Reconstruction Company registered with the Reserve
Bank of India;
127
(c) securities of investee companies,
(i) whose stressed loans are available for acquisition in terms of Clause 58 of the
Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021
as amended from time to time or as part of a resolution plan approved under the
Insolvency and Bankruptcy Code, 2016 or in terms of any other policy of the Reserve
Bank of India or Government of India issued in this regard from time to time;
(ii) against whose borrowings, security receipts have been issued by an Asset
Reconstruction Company registered with the Reserve Bank of India;
(iii) whose borrowings are subject to corporate insolvency resolution process under
Chapter II of the Insolvency and Bankruptcy Code, 2016;
(iv) who have disclosed all the defaults relating to the payment of interest/ repayment
of principal amount on loans from banks / financial institutions/ Systemically Important
Non-Deposit taking Non-Banking Financial Companies/ Deposit taking Non-Banking
Financial Companies and /or listed or unlisted debt securities in terms of the Securities
and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 and such payment default is continuing for a period of at least ninety
calendar days after the occurrence of such default:
Provided that in case of sub-clauses (iii) and (iv), the credit rating of the financial
instruments or credit instruments or borrowings of the company has been downgraded to
“D” or equivalent;
(d) Any other asset as may be specified by the Board from time to time;
(3) “special situation fund” means a Category 1 Alternative Investment Fund that invests in
special situation assets in accordance with its investment objectives and may act as a resolution
applicant under the Insolvency and Bankruptcy Code, 2016.
Applicability.
19J. (1) The provisions of this Chapter shall apply to special situation funds and schemes
launched by such special situation funds.
(3) All other provisions of these regulations, except clauses (b) and (c) of regulation 10,
clauses (a), (c) and (e) of sub-regulation (1) of regulation 15, clause (a) of sub-regulation (1) of
regulation 16 and the guidelines and circulars issued under these regulations, unless the context
otherwise requires or is repugnant to the provisions of this Chapter, shall apply to the special
situation funds, the schemes of special situation funds and their sponsors and managers.
Registration of special situation funds.
19K. An applicant may apply for registration as a special situation fund in accordance with the
provisions of Chapter II of these Regulations.
Investment in special situation funds.
19L. (1) Each scheme of a special situation fund shall have a corpus as may be specified by the
Board.
(2) The special situation fund shall accept from an investor, an investment of such value as
may be specified by the Board.
(3) The special situation fund shall not accept investments from any other Alternative
Investment Fund other than a special situation fund.
Investment by special situation funds.
19M. (1) Special situation funds shall invest only in special situation assets and may act as a
resolution applicant under the Insolvency and Bankruptcy Code, 2016:
Provided that the special situation fund shall not invest in,
i. its associates; or
ii. the units of any other Alternative Investment Fund other than the units of a special
situation fund; or
iii. units of special situation funds managed or sponsored by its manager, sponsor or
associates of its manager or sponsor.
(2) Any investment by a special situation fund in the stressed loan acquired under clause 58
of the Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021
as amended from time to time shall be subject to lock-in period as may be specified by the
Board.]
128
[CHAPTER III - C
CORPORATE DEBT MARKET DEVELOPMENT FUND
Applicability.
19N. (1) The provisions of this Chapter shall apply only to the Corporate Debt Market
Development Fund.
(2) All other provisions of these regulations, except the following provisions and the guidelines
and circulars issued under these regulations, unless the context otherwise requires or is repugnant
to the provisions of this Chapter, shall apply to the Corporate Debt Market Development Fund,
its sponsor, manager, trustee and investors:
i. sub regulation (2) of regulation 9;
ii. clauses (a), (c), (d), and (f) of regulation 10;
iii. sub regulations (2) and (3) of regulation 12;
iv. sub regulations (1), (2), (3), (5) and (6) of regulation 13;
v. regulations 14, 16, 17, 18, 19, Chapter III-A and III-B, 23;
vi. sub regulation (1) of regulation 15;
vii. sub regulation (15) of regulation 20;
128
viii. clause (a), (b) and (c) of sub regulation (1) of regulation 29;
ix. sub regulations (2),(3), (4) and (8) of regulation 29.
Registration of the Corporate Debt Market Development Fund.
19O. (1) The Corporate Debt Market Development Fund shall be constituted in the form of a
Trust and the instrument of Trust shall be in the form of a deed duly registered under the
provisions of the Indian Registration Act, 1908.
(2) The Corporate Debt Market Development Fund shall apply for registration as an Alternative
Investment Fund in accordance with the provisions of Chapter II of these regulations.
(3) The placement memorandum of the Corporate Debt Market Development Fund shall be filed
with the Board.
(4) The Board may communicate its comments, if any, to the Manager prior to the launch of the
fund and the Manager shall incorporate the comments in the placement memorandum prior to the
launch of the fund.
(5) The Corporate Debt Market Development Fund shall be a close ended fund, with a tenure of
fifteen years from the date of its first closing:
Provided that the tenure may be extended with the prior approval of the Board.
(6) The Corporate Debt Market Development Fund shall be wound up with the prior approval of
the Board.
Investment in the Corporate Debt Market Development Fund.
19P. (1) The units of the Corporate Debt Market Development Fund shall be offered to the Asset
Management Companies as defined under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996 and the specified debt-oriented schemes of mutual funds.
(2) The investment by the Asset Management Companies and the specified debt-oriented
schemes of the mutual funds shall be in accordance with the provisions of the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.
(3) The Manager or Sponsor shall have a continuing interest in the Corporate Debt Market
Development Fund of not less than five crore rupees in the form of investment in the fund but
such continuing interest shall not be through the waiver of management fees.
Investment conditions for the Corporate Debt Market Development Fund.
19Q. (1) During periods of market dislocation, the Corporate Debt Market Development Fund
shall purchase corporate debt securities from the specified debt-oriented schemes of mutual
funds which meet the following eligibility criteria:
(a) corporate debt securities shall be listed and have

an investment grade rating;
(b) the residual maturity of such securities shall not

exceed five years on the date of purchase;
(c) securities where there is no material possibility

of default or adverse credit news or views.
Explanation: For the purpose of sub regulation (1) of this regulation, the Board shall decide the
trigger of market dislocation and its reversal based on the parameters as may be specified by the
Board.
(2) The Corporate Debt Market Development Fund shall purchase corporate debt securities in
proportion to the contribution made in it at a mutual fund level and in accordance with detailed
guidelines as may be approved by the Board.
(3) The Corporate Debt Market Development Fund shall hold eligible securities as mentioned in
sub regulation (1) of this regulation, till maturity or sell the same in the secondary market upon
reversal of market dislocation, in the manner as specified by the Board from time to time.
(4) Other than market dislocation period, the Corporate Debt Market Development Fund shall
invest in liquid and low-risk debt instruments and undertake any other activity related to
corporate debt market, as may be specified by the Board from time to time.
(5) The Corporate Debt Market Development Fund shall buy corporate debt securities at fair
price adjusted for liquidity risk, interest rate risk and credit risk but not at distress prices.
(6) The sharing of loss by the sellers of corporate debt securities to the Corporate Debt Market
Development Fund during periods of market dislocation may be higher than their pro rata
holding in the Alternative Investment Fund vis-à-vis other unit holders.
(7) The Corporate Debt Market Development Fund shall not invest in the securities of companies
incorporated outside India.
(8) Investment by the Corporate Debt Market Development Fund in any one investee company
shall not exceed five percent of its fund capital at the time of investment:
Provided that the combined investment in the corporate debt securities of an issuer group as
specified under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996
shall not exceed seven and half percent of its fund capital at the time of investment.
Explanation: For the purpose of this sub-regulation, ‘fund capital’ shall be the aggregate of the
corpus of the fund and maximum permissible borrowing as per sub-regulation (9) of this
regulation.
(9) The Corporate Debt Market Development Fund may borrow funds up to ten times its corpus,
subject to such conditions as may be specified by the Board in consultation with the Government
of India.
(10) The valuation procedure and methodology for valuing assets of the Corporate Debt Market
Development Fund shall be governed by the norms applicable to Mutual Fund schemes under the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
(11) In-specie distribution of assets of the Corporate Debt Market Development Fund may be
made to the unit holders, only at the time of winding up subject to the consent of seventy-five
percent of the unit holders by value of their investment in such fund.
(12) Any material alteration to the investment strategy of the Corporate Debt Market
Development Fund shall be with the prior approval of the Board.
Disclosures.
19R. (1) The portfolio of the Corporate Debt Market Development Fund shall be disclosed to the
unitholders on a fortnightly basis.
(2) The Net Asset Value of the Corporate Debt Market Development Fund shall be disclosed to
the unitholders on a daily basis.
Governance Mechanism for the Corporate Debt Market Development Fund.
19S. (1) The Corporate Debt Market Development Fund shall appoint a trustee company.
(2) The Board of directors of trustee company and the Manager of the Corporate Debt Market
Development Fund shall be appointed with the prior approval of the Board.
(3) The roles and responsibilities of the trustee company shall be similar to the roles and
responsibilities assigned to trustees under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996.
(4) The trustee company of the Corporate Debt Market Development Fund shall not engage in
any activity other than acting as a trustee of the Corporate Debt Market Development Fund,
except with the prior written consent of the Board:
Provided that any other activity of the trustee company as permitted by the Board shall not be in
conflict with its role as the trustee of the Corporate Debt Market Development Fund.
(5) Two-thirds of the members of the board of directors of the trustee company shall be
independent directors and shall not be associated with the Sponsor or the Manager in any manner
whatsoever.
(6) No person shall initially or any time thereafter be appointed as a director of the trustee
company of the Corporate Debt Market Development Fund without the prior approval of the
Board.
(7) An audit committee of the trustee company shall be constituted to review compliance with
the provisions of placement memorandum as required under these regulations along with other
responsibilities as may be specified by the Board from time to time.
(8) The manager of the Corporate Debt Market Development Fund shall appoint a Governance
Committee.
(9) The Governance Committee shall comprise corporate bond market experts including
academicians, fund managers or Chief Investment Officers, risk management professionals and
independent market experts.
(10) The Governance Committee, jointly with the board of the Manager and trustee company,
shall approve the policies of the Corporate Debt Market Development Fund.
(11) The Governance Committee shall supervise the activities of the Corporate Debt Market
Development Fund, especially relating to management of conflict of interest, if any.
(12) The Governance Committee shall have oversight on management of asset liability
mismatches during times of market dislocation.
Prohibition of Listing.
19T. The units of the Corporate Debt Market Development Fund shall not be listed on any
recognised stock exchange.
Others.
19U. (1) The provisions of Chapter III-C of these regulations shall cease to exist upon the
winding up of the Corporate Debt Market Development Fund.
(2) Notwithstanding anything contained in sub-regulation (1) of this regulation, the Manager of
Corporate Debt Market Development Fund shall continue to be responsible for any liabilities,
that may arise out of the mandate in relation to its investment management activities.”]
CHAPTER IV
GENERAL OBLIGATIONS AND RESPONSIBILITIES AND TRANSPERANCY
General Obligations.
129
[20 (1) Alternative Investment Fund, key management personnel of the Alternative Investment
Fund, trustee, trustee company, directors of the trustee company, designated partners or directors
129
Regulations, 2021, w.e.f. 05-05-2021.Prior to its substitution regulation 20 read as follows-
“20(1) All Alternative Investment Funds shall review policies and procedures, and their implementation, on a
regular basis, or as a result of business developments, to ensure their continued appropriateness.
of the Alternative Investment Fund, as the case may be, managers and key management
personnel of managers shall abide by the Code of Conduct as specified in the Fourth Schedule.
Explanation.– For the purpose of this sub-regulation, ‘key management personnel’ shall have the
meaning as specified by the Board from time to time.
(2) The Manager and either the trustee or trustee company or the Board of Directors or the
designated partners of the Alternative Investment Fund, as the case may be, shall ensure
compliance by the Alternative Investment Fund with the Code of Conduct as specified in the
Fourth Schedule.
(2) The Sponsor or Manager of Alternative Investment Fund shall appoint a custodian registered with the
Board for safekeeping of securities if the corpus of the Alternative Investment Fund is more than five hundred crore
rupees:
Provided that the Sponsor or Manager of a Category III Alternative Investment Fund shall appoint such custodian
irrespective of the size of corpus of the Alternative Investment Fund.
*[Provided further that the custodian appointed by Category III Alternative Investment Fund shall keep custody of
securities and goods received in delivery against physical settlement of commodity derivatives.]
(3) All Alternative Investment Funds shall inform the Board in case of any change in the Sponsor, Manager or
designated partners or any other material change from the information provided by the Alternative Investment Fund
at the time of application for registration.
(4) In case of change in control of the Alternative Investment Fund, Sponsor or Manager, prior approval from
the Board shall be taken by the Alternative Investment Fund.
(5) The books of accounts of the Alternative Investment Fund shall be audited annually by a qualified auditor.
**[(6) The Manager shall be responsible for investment decisions of the Alternative Investment Fund:
Provided that the Manager may constitute an Investment Committee (by whatever name it may be called), to
approve investment decisions of the Alternative Investment Fund, subject to the following:
(i) The members of Investment Committee shall be equally responsible as the Manager for investment
decisions of the Alternative Investment Fund.
(ii) The Manager and members of the Investment Committee shall jointly and severally ensure that the
investments of the Alternative Investment Fund are in compliance with the provisions of these regulations, the terms
of the placement memorandum, agreement made with the investor, any other fund documents and any other
applicable law.
(iii) External members whose names are not disclosed in the placement memorandum or agreement made with
the investor or any other fund documents at the time of on-boarding investors, shall be appointed to the Investment
Committee only with the consent of at least seventy five percent of the investors by value of their investment in the
Alternative Investment Fund or scheme.
(iv) Any other conditions as specified by the Board from time to time ***[:]]
***[Provided further that clauses (i) and (ii) shall not apply to an Alternative Investment Fund in which each
investor other than the Manager, Sponsor, employees or directors of the Alternative Investment Fund or employees
or directors of the Manager, has committed to invest not less than seventy crore rupees (or an equivalent amount in
currency other than Indian rupee) and has furnished a waiver to the Alternative Investment Fund in respect of
compliance with the said clauses, in the manner specified by the Board.]”
* Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations,
2019, w.e.f. 10-05-2019.
** Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2020, w.e.f. 19-10-2020.
*** Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment)
Regulations, 2021, w.e.f. 08-01-2021.
(3) All Alternative Investment Funds shall have detailed policies and procedures, as approved
jointly by the Manager and the trustee or trustee company or Board of Directors or designated
partners of the Alternative Investment Fund, as the case may be, to ensure that all the decisions
of the Alternative Investment Fund are in compliance with the provisions of these regulations,
terms of the placement memorandum, agreements made with investors, other fund documents
and applicable laws.
(4) All Alternative Investment Funds shall review the policies and procedures laid down in terms
of sub regulation (3) of this regulation, other internal policies, if any, and their implementation,
on a regular basis or as a result of business developments, to ensure their continued
appropriateness.
(5) The Manager shall be responsible for every decision of the Alternative Investment Fund,
including ensuring that the decisions are in compliance with the provisions of these regulations,
terms of the placement memorandum, agreements made with investors, other fund documents
and applicable laws.
(6) The Manager shall be responsible for ensuring that every decision of the Alternative
Investment Fund is in compliance with the policies and procedures laid down for the Alternative
Investment Fund in terms of sub regulation (3) of this regulation and other internal policies of the
Alternative Investment Fund, as applicable.
(7) The Manager may constitute an Investment Committee (by whatever name called), to
approve the decisions of the Alternative Investment Fund and such constitution shall be subject
to such conditions as specified by the Board from time to time.
(8) The members of the Investment Committee shall be responsible for ensuring that the
decisions of the Investment Committee are in compliance with the policies and procedures laid
down in terms of sub regulation (3) of this regulation:
Provided that sub-regulation (8) of this regulation shall not apply to an Alternative
Investment Fund in which each investor other than the Manager, Sponsor, employees or directors
of the Alternative Investment Fund or employees or directors of the Manager, has committed to
invest not less than seventy crore rupees (or an equivalent amount in currency other than Indian
rupees) and has furnished a waiver to the Alternative Investment Fund in respect of compliance
with the said sub-regulation, in the manner as may be specified by the Board.
(9) The members of the Investment Committee shall abide by the Code of Conduct applicable to
them as specified in Fourth Schedule.
(10) The external members of the Investment Committee whose names are not disclosed in the
placement memorandum or in the agreement made with the investor or any other fund document
at the time of on-boarding investors shall be appointed to the Investment Committee only with
the consent of at least seventy five percent of the investors by the value of their investment in the
Alternative Investment Fund or scheme.
(11) The Sponsor or Manager of the Alternative Investment Fund shall appoint a custodian
registered with the Board for safekeeping of the securities if the corpus of the Alternative
Investment Fund is more than five hundred crore rupees:
Provided that the Sponsor or Manager of a Category III Alternative Investment Fund shall
appoint such a custodian, irrespective of the size of the corpus of the Alternative Investment
Fund:
Provided further that the custodian appointed by Category III Alternative Investment Fund shall
keep the custody of the securities and goods received in delivery against the physical settlement
of commodity derivatives.
130
[ Provided further that the Sponsor or Manager of the Category I and Category II Alternative
Investment Fund transacting in credit default swaps shall appoint a custodian registered with the
Board and comply with such terms and conditions as may be specified by the Board.]
131
(12) All Alternative Investment Funds shall inform the Board in case of any [***] material
change from the information provided by the Alternative Investment Fund at the time of
application for registration.
132
(13) In case of [change of Sponsor or Manager, or] change in control of the Alternative
Investment Fund, Sponsor or Manager, prior approval from the Board shall be taken by the
133
Alternative Investment Fund [, subject to levy of fees and any other conditions as may be
specified by the Board from time to time].
Regulations, 2023, w.e.f 09-01-2023.
131
Omitted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment)
Regulations, 2022, w.e.f. 15-11-2022.
132
Regulations, 2022, w.e.f. 15-11-2022.
133
Regulations, 2022, w.e.f. 15-11-2022.
(14) The books of accounts of the Alternative Investment Fund shall be audited annually by a
qualified auditor.]
134
[(15) The manager shall not provide advisory services to any investor other than the
clients of Co-investment Portfolio Manager as specified in the Securities and Exchange
Board of India (Portfolio Managers) Regulations, 2020, for investment in securities of investee
companies where the Alternative Investment Fund managed by it makes investment.]
135
[(16) The Manager and either the trustee or the trustee company or the Board of Directors or
designated partners of the Alternative Investment Fund, as the case may be, shall ensure that the
assets and liabilities of each scheme of an Alternative Investment Fund are segregated and ring-
fenced from other schemes of the Alternative Investment Fund; and bank accounts and securities
accounts of each scheme are segregated and ring-fenced.]
136
[(17) The Manager shall appoint a Compliance Officer who shall be responsible for
monitoring compliance with the provisions of the Act, rules, regulations, notifications, circulars,
guidelines, instructions or any other directives issued by the Board.
(18) The Compliance Officer shall satisfy the eligibility criteria as may be specified by the Board
from time to time.
(19) The Compliance Officer shall immediately and independently report to the Board any non-
compliance observed by him, as soon as possible but not later than seven working days from the
date of observing such non-compliance.]
Conflict of Interest.
21. (1) The Sponsor and Manager of the Alternative Investment Fund shall act in a fiduciary
capacity towards its investors and shall disclose to the investors, all conflicts of interests
as and when they arise or seem likely to arise.
(2) Manager shall establish and implement written policies and procedures to identify,
monitor and appropriately mitigate conflicts of interest throughout the scope of business.
134
Inserted by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment)
135
Regulations, 2022, w.e.f. 15-11-2022.
136
(3) Managers and Sponsors of Alternative Investment Fund shall abide by high level
principles on avoidance of conflicts of interest with associated persons, as may be
specified by the Board from time to time.
Transparency.
22. All Alternative Investment Funds shall ensure transparency and disclosure of information
to investors on the following:
(a) financial, risk management, operational, portfolio, and transactional information

regarding fund investments shall be disclosed periodically to the investors;
(b) any fees ascribed to the Manager or Sponsor; and any fees charged to the Alternative
Investment Fund or any investee company by an associate of the Manager or Sponsor
shall be disclosed periodically to the investors;
(c)any inquiries/ legal actions by legal or regulatory bodies in any jurisdiction, as and when
occurred;
(d) any material liability arising during the Alternative Investment Fund’s tenure shall be
disclosed, as and when occurred;
(e) any breach of a provision of the placement memorandum or agreement made with the
investor or any other fund documents, if any, as and when occurred;
(f) change in control of the Sponsor or Manager or Investee Company.
(g) Alternative Investment Fund shall provide at least on an annual basis, within 180 days
from the year end, reports to investors including the following information, as may be
applicable to the Alternative Investment Fund:-
A. financial information of investee companies.

B. material risks and how they are managed which may include:
(i) concentration risk at fund level;
(ii) foreign exchange risk at fund level;

(iii)leverage risk at fund and investee company levels;
(iv) realization risk (i.e. change in exit environment) at fund and investee company
levels;
(v) strategy risk (i.e. change in or divergence from business strategy) at investee
company level;
(vi) reputation risk at investee company level;
(vii) extra-financial risks, including environmental, social and corporate governance

risks, at fund and investee company level.
(h) Category III Alternative Investment Fund shall provide quarterly reports to investors in
respect of clause (g) within 60 days of end of the quarter;
(i) any significant change in the key investment team shall be intimated to all investors;
(j) alternative Investment Funds shall provide, when required by the Board, information for
systemic risk purposes (including the identification, analysis and mitigation of systemic
risks).
Valuation.
137
23. (1) The Alternative Investment Fund shall [carry out valuation of its investments in the
manner specified by the Board from time to time and] provide to its investors, a
description of its valuation procedure and of the methodology for valuing assets.
(2) Category I and Category II Alternative Investment Funds shall undertake valuation of
their investments, atleast once in every six months, by an independent valuer appointed
by the Alternative Investment Fund:
Provided that such period may be enhanced to one year on approval of atleast seventy-
five percent of the investors by value of their investment in the Alternative Investment
Fund.
(3) Category III Alternative Investment Funds shall ensure that calculation of the net asset
value (NAV) is independent from the fund management function of the Alternative
137
Investment Fund and such NAV shall be disclosed to the investors at intervals not longer
than a quarter for close ended Funds and at intervals not longer than a month for open
ended funds:
138
[Provided that for the purpose of calculation of NAV, Category III Alternative
Investment Funds shall undertake valuation of their investment in unlisted securities and
listed debt securities by an independent valuer.
(4) The Manager shall ensure that the Alternative Investment Fund appoints an
independent valuer who satisfies the criteria specified by the Board from time to time.
(5) The Manager and the key management personnel of the Manager shall ensure that the
independent valuer computes and carries out valuation of the investments of the scheme
of the Alternative Investment Fund in the manner specified by the Board from time to
time.
(6) The Manager shall be responsible for true and fair valuation of the investments of the
scheme of the Alternative Investment Fund:
Provided that in case the established policies and procedures of valuation do not result in
fair and appropriate valuation, the Manager shall deviate from the established policies
and procedures in order to value the assets or securities at a fair value and document the
rationale for such deviation:
Provided further that such deviation and its rationale shall be reported to the trustee or the
trustee company or the Board of Directors or designated partners of the Alternative
Investment Fund and investors of the Alternative Investment Fund.]
Obligation of Manager.
24. The Manager shall be obliged to:
(a) address all investor complaints;
(b) provide to the Board any information sought by Board;
138
(c) maintain all records as may be specified by the Board;
(d) take all steps to address conflict of interest as specified in these regulations;
(e) ensure transparency and disclosure as specified in the regulations.
139
[ Grievance Redressal Mechanism.
24A. (1) The Manager shall redress investor grievances promptly but not later than twenty-one
calendar days from the date of receipt of the grievance and in such manner as may be specified
by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of
grievance redressal within such time and in such manner as may be specified.]
Dispute Resolution.
140
25. [All claims, differences or disputes between investors and the Alternative Investment
Fund or the Manager arising out of or in relation to the activities of the Alternative
Investment Fund or the Manager in the securities market shall be submitted to a dispute
resolution mechanism that includes mediation and/or conciliation and/or arbitration, in
accordance with the procedure specified by the Board:
Provided that if the Alternative Investment Fund has been established as a trust, then no loss
or damage or expenses incurred by the Manager or officers of the Manager, including those
in relation to resolution of claims or disputes of investors, shall be met out of the trust
property.]
Power to call for information.
139
Inserted by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism)
(Amendment) Regulations, 2023 w.e.f. 18-08-2023.
140
Substituted by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism)
(Amendment) Regulations, 2023 w.e.f 04-07-2023. Prior to its substitution, the regulation read as follows:
“An Alternative Investment Fund, by itself or through the Manager or Sponsor, shall lay down procedure for
resolution of disputes between the investors, Alternative Investment Fund, Manager or Sponsor through arbitration
or any such mechanism as mutually decided between the investors and the Alternative Investment Fund.”
26. (1) The Board may at any time call for any information from an Alternative
Investment Fund or its Manager or Sponsor or trustee or investor with respect to any
matter relating to its activity as an Alternative Investment Fund or for the assessment of
systemic risk or prevention of fraud.
(2) Where any information is called for under sub-regulation (1) it shall be furnished within
the time specified by the Board.
Maintenance of Records.
27. (1) The Manager or Sponsor shall be required to maintain following records describing:
(a) the assets under the scheme/fund;
(b) valuation policies and practices;
(c) investment strategies;
(d) particulars of investors and their contribution;
(e) rationale for investments made.
(2) The records under sub-regulation (1) shall be maintained for a period of five years after
the winding up of the fund.
Submission of reports to the Board.
28. The Board may at any time call upon the Alternative Investment Fund to file such reports, as
the Board may desire, with respect to the activities carried on by the Alternative Investment
Fund.
Winding up.
29. (1) An Alternative Investment Fund set up as a trust shall be wound up:
(a) when the tenure of the Alternative Investment Fund or all schemes launched by the
Alternative Investment Fund, as mentioned in the placement memorandum is over;
or
(b) if it is the opinion of the trustees or the trustee company, as the case may be, that the
Alternative Investment Fund be wound up in the interests of investors in the units;
or
(c) if seventy five percent of the investors by value of their investment in the Alternative
Investment Fund pass a resolution at a meeting of unitholders that the Alternative
Investment Fund be wound up; or
(d) if the Board so directs in the interests of investors.
(2) An Alternative Investment Fund set up as a limited liability partnership shall be wound
up in accordance with the provisions of The Limited Liability Partnership Act, 2008:
(a) when the tenure of the Alternative Investment Fund or all schemes launched by the
Alternative Investment Fund, as mentioned in the placement memorandum is over;
or
(b) if seventy five percent of the investors by value of their investment in the Alternative
Investment Fund pass a resolution at a meeting of unitholders that the Alternative
Investment Fund be wound up; or
(c) if the Board so directs in the interests of investors.
(3) An Alternative Investment Fund set up as a company shall be wound up in accordance

with the provisions of the 141[Companies Act, 2013].
(4) An Alternative Investment Fund set up as a body corporate shall be wound up in

accordance with the provisions of the statute under which it is constituted.
(5) The trustees or trustee company or the Board of Directors or designated partners of the
Alternative Investment Fund, as the case maybe, shall intimate the Board and investors of
the circumstances leading to the winding up of the Alternative Investment Fund.
(6) On and from the date of intimation under sub-regulation (5) of regulation 29, no further
investments shall be made on behalf of the Alternative Investment Fund so wound up.
142
(7) Within [the liquidation period], the assets shall be liquidated, and the proceeds
143
accruing to investors in the Alternative Investment Fund [or the scheme of the
Alternative Investment Fund] shall be distributed to them after satisfying all liabilities.
141
Regulations, 2018, w.e.f. 01-06-2018. Prior to its substitution, it read as “Companies Act, 1956 (1 of 1956)”.
(8) Notwithstanding anything contained in sub-regulation (7) and subject to the conditions, if
any, contained in the placement memorandum or contribution agreement or subscription
144
agreement, as the case may be, [in specie distribution of assets of the scheme of the
Alternative Investment Fund], shall be made by the Alternative Investment Fund at any
145
time, [including on winding up of the scheme of the Alternative Investment Fund], as
per the preference of investors, 146[subject to conditions as may be specified by the Board
from time to time].
147
(9) [Notwithstanding anything contained in sub-regulation (7), during liquidation period of
a scheme, an Alternative Investment Fund may distribute investments of a scheme which
are not sold due to lack of liquidity, in-specie to the investors or sell such investments to
a liquidation scheme, after obtaining approval of at least seventy five percent of the
investors by value of their investment in the scheme of the Alternative Investment Fund,
in the manner and subject to conditions specified by the Board from time to time:
Provided that in the absence of consent of unit holders for exercising the options under
sub-regulation (9) during liquidation period, such investments of the scheme of the
Alternative Investment Fund shall be dealt with in the manner as may be specified by the
Board from time to time.]
(10) Upon winding up of the Alternative Investment Fund, the certificate of registration shall
be surrendered to the Board.
142
Substituted for the words “one year from the date of intimation under sub-regulation (5) of regulation 29” by the
Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023
w.e.f 15-06-2023.
143
144
Substituted for the words “in specie distribution of assets of the Alternative Investment Fund” by the Securities
and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023 w.e.f 15-06-
2023.
145
Substituted for the words “including on winding up of the Alternative Investment Fund” by the Securities and
Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023 w.e.f 15-06-
2023.
146
Substituted for the words “after obtaining approval of at least seventy five percent of the investors by value of
their investment in the Alternative Investment Fund” by the Securities and Exchange Board of India (Alternative
Investment Funds) (Second Amendment) Regulations, 2023 w.e.f 15-06-2023.
147
148
[Liquidation Scheme.
29A. (1) The Alternative Investment Fund may launch a liquidation scheme subject to filing of
placement memorandum with the Board.
(2) The requirements under Regulation 10(b), Regulation 10(c), Regulation 12, Regulation 13(1),
Regulation 13(2), Regulation 13(4), Regulation 13(5), Regulation 15, Regulation 16, Regulation
17, Regulation 18, Regulation 19L(1), Regulation 19L(2), Regulation 19M, Regulation 29 (7)
and Regulation 29 (9) shall not apply to a liquidation scheme of the Alternative Investment Fund.
(3) The placement memorandum of liquidation scheme of the Alternative Investment Fund shall
be filed with the Board through a merchant banker along with the fees as specified in the Second
Schedule.
(4) The tenure of liquidation scheme of the Alternative Investment Fund shall be determined at
the time of filing of placement memorandum with the Board in the manner and subject to
conditions as may be specified by the Board.
(5) The tenure of liquidation scheme of the Alternative Investment Fund shall not be extended.
(6) The liquidation scheme of the Alternative Investment Fund shall not accept any fresh
commitment from any investor and shall not make any new investment.
(7) The investments of the liquidation scheme of the Alternative Investment Fund which are not
sold due to lack of liquidity by the end of its tenure shall be dealt with, in the manner as may be
specified by the Board from time to time.]
CHAPTER V
INSPECTION
Board’s right to inspect.
30. The Board may suo motu or upon receipt of information or complaint appoint one or more
persons as Inspecting Authority to undertake inspection of the books of account, records and
documents relating to an Alternative Investment Fund for any of the following reasons,
namely, —
148
(a) to ensure that the books of account, records and documents are being maintained by the
Alternative Investment Fund in the manner specified in these regulations;
(b) to inspect complaints received from investors, clients or any other person, on any matter
having a bearing on the activities of the Alternative Investment Fund;
(c) to ascertain whether the provisions of the Act and these regulations are being complied
with by the Alternative Investment Fund;
(d) to inspect suo motu the affairs of an Alternative Investment Fund, in the interest of the
securities market or in the interest of investors.
Notice before inspection.
31. (1) Before ordering an inspection under regulation 30, the Board shall give not less
than ten days notice to the Alternative Investment Fund.
(2) Notwithstanding anything contained in sub-regulation (1) where the Board is satisfied
that in the interest of the investors no such notice should be given, it may by an order in
writing direct that the inspection of the affairs of the Alternative Investment Fund be
taken up without such notice.
(3) During the course of an inspection, the Alternative Investment Fund against whom the
inspection is being carried out shall be bound to discharge its obligations as provided in
regulation 32.
Obligation of Alternative Investment Fund on inspection.
32. (1) It shall be the duty of every officer of the Alternative Investment Fund in respect
of whom an inspection has been ordered under regulation 30 and any other associated
person who is in possession of relevant information pertaining to conduct and affairs of
such Alternative Investment Fund including Manager, if any, to produce to the Inspecting
Authority such books, accounts and other documents in his custody or control and furnish
him with such statements and information as the said Authority may require for the
purposes of the inspection.
(2) It shall be the duty of every officer of the Alternative Investment Fund and any other
associated person who is in possession of relevant information pertaining to conduct and
affairs of the Alternative Investment Fund including the manager to give to the Inspecting
Authority all such assistance and shall extend all such co-operation as may be required in
connection with the inspection and shall furnish such information as sought by the
Inspecting Authority in connection with the inspection.
(3) The Inspecting Authority shall, for the purposes of inspection, have power to examine on
oath and record the statement of any employees, directors or person responsible for or
connected with the activities of Alternative Investment Fund or any other associated
person having relevant information pertaining to such Alternative Investment Fund.
(4) The Inspecting Authority shall, for the purposes of inspection, have power to obtain
authenticated copies of documents, books, accounts of Alternative Investment Fund, from
any person having control or custody of such documents, books or accounts.
Submission of report to the Board.
33. The Inspecting Authority shall, as soon as possible, on completion of the inspection submit
an inspection report to the Board:
Provided that if directed to do so by the Board, he may submit an interim report.
Communication of findings, etc. to the Alternative Investment Fund.
34. The Board may after consideration of the inspection report and after giving reasonable
opportunity of hearing to the Alternative Investment Fund or its trustees, directors or
manager issue such direction as it deems fit in the interest of securities market or the
investors including directions in the nature of :—
(a) requiring an Alternative Investment Fund not to launch new schemes or raise money
from investors for a particular period;
(b) prohibiting the person concerned from disposing of any of the properties of the fund or
scheme acquired in violation of these regulations;
(c) requiring the person connected to dispose of the assets of the fund or scheme in a manner
as may be specified in the directions;
(d) requiring the person concerned to refund any money or the assets to the concerned
investors along with the requisite interest or otherwise, collected under the scheme;
(e) prohibiting the person concerned from operating in the capital market or from accessing
the capital market for a specified period.
CHAPTER VI
PROCEDURE FOR ACTION IN CASE OF DEFAULT
Liability for action in case of default.
35. (1) An Alternative Investment Fund which—
(a) contravenes any of the provisions of the Act or these regulations;
(b) fails to furnish any information relating to its activity as an Alternative Investment
Fund as required by the Board;
(c) furnishes to the Board information which is false or misleading in any material
particular;
(d) does not submit periodic returns or reports as required by the Board;
(e) does not co-operate in any enquiry, inspection or investigation conducted by the
Board;
(f) fails to resolve the complaints of investors or fails to give a satisfactory reply to the
Board in this behalf,
shall be dealt with in the manner provided under the Securities and Exchange Board of
India (Intermediaries) Regulations, 2008.
(2) Sub-regulation (1) shall not prejudice the powers of the Board to issue directions or
measures under regulation 34 or under sections 11, 11B, 11D, sub-section (3) of section
12 or section 24 or Chapter VIA of the Act or under any other law for the time being in
force.
149
[CHAPTER VI-A
149
Inserted by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020,
w.e.f. 17-04-2020.
POWER TO RELAX STRICT ENFORCEMENT OF THE REGULATIONS
Exemption from enforcement of the regulations in special cases.
35A. (1) The Board may, exempt any person or class of persons from the operation of all or
any of the provisions of these regulations for a period as may be specified but not exceeding
twelve months, for furthering innovation 150[***] relating to testing new products, processes,
services, business models, etc. in live environment of regulatory sandbox in the securities
markets.
(2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the
applicant satisfying such conditions as may be specified by the Board including
conditions to be complied with on a continuous basis.
Explanation. —For the purposes of these Regulations , "regulatory sandbox" means
a live testing environment where new products, processes, services, business models,
etc. may be deployed on a limited set of eligible customers for a specified period of time,
for furthering innovation in the securities market, subject to such conditions as may be
specified by the Board.]
CHAPTER VII
MISCELLANEOUS
Power of the Board to issue clarifications.
36. In order to remove any difficulties in the application or interpretation of these regulations, the
Board may issue clarifications and guidelines in the form of circulars or issue separate
circular or guidelines or framework for each category of Alternative Investment Funds.
Delegation of powers.
37. The powers exercisable by the Board under these regulations shall also be exercisable by any
officer of the Board to whom such powers are delegated by the Board by means of an order
made under section 19 of the Securities and Exchange Board of India Act, 1992.
150
The words “in technological aspects” omitted by the Securities and Exchange Board of India (Regulatory
Sandbox) (Amendment) Regulations, 2021, w.e.f. 03-08-2021.
Amendments to other Regulations.
38. The regulations specified in the Third Schedule to these regulations shall be amended in the
manner and to the extent stated therein.
Repeal and Saving.
39. (1) The Securities and Exchange Board of India (Venture Capital Funds) Regulations,
1996 hereby shall stand repealed.
(2) Notwithstanding such repeal:
(a) Anything done or any action taken or purported to have been done or taken,
including suspension or cancellation of certificate of registration, any inquiry or
investigation commenced or show cause notice issued under the repealed
regulations, shall be deemed to have been done or taken under the corresponding
provisions of these regulations;
(b) All venture capital funds or schemes launched by such venture capital funds prior to
date of notification of these regulations shall continue to be governed by provisions
of Securities and Exchange Board of India (Venture Capital Funds) Regulations,
1996 till the fund or Scheme is wound up:
Provided that such funds shall not launch any new Scheme after notification of
these regulations;
(c) Any application made to the Board under the Securities and Exchange Board of
India (Venture Capital Funds) Regulations, 1996 and pending before it shall be
deemed to have been made under the corresponding provisions of Securities and
Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
(3) After the repeal of Securities and Exchange Board of India (Venture Capital Funds)
Regulations, 1996, any reference thereto in any other regulations made, guidelines or
circulars issued thereunder by the Board shall be deemed to be a reference to the
corresponding provisions of these regulations.
FIRST SCHEDULE-FORM
FORM A
Securities and Exchange Board of India

(Alternative Investment Funds) Regulations, 2012
See regulation 3
Application for Grant of Certificate of Registration as Alternative Investment Fund

SEBI Bhavan, C4-A, G Block, Bandra Kurla Complex, Mumbai 400051 - India
INSTRUCTIONS
1. This form is meant for use by the applicant for grant of certificate of registration as an
Alternative Investment Fund.
2. The applicant should complete this form, and submit it, along with all supporting documents
to the Board at its head office at Mumbai.
3. This application form should be filled in accordance with these regulations.
4. The application shall be considered by the Board provided it is complete in all respects.
5. All answers must be legible and all the pages must be numbered with signature/ stamp on
each page of the form.
6. Information which needs to be supplied in more detail may be given on separate sheets which
should be attached to the application form and appropriately numbered.
7. The application must be signed and all signatures must be original.
8. The application must be accompanied by an application fee as specified in the Second
Schedule to these regulations.
1. GENERAL INFORMATION
(a) Name, address of the registered office, address for correspondence and principal place
of business, telephone number(s), fax number(s), e-mail address of the applicant.
(b) Name, direct line number, mobile number and e-mail of the contact person(s).
(c) Legal structure of applicant - Whether the applicant is a company or trust or limited
liability partnership or a body corporate.
(d) Date and place of incorporation/ establishment.
151
[(e) Category under which the application is made –
1. Category I Alternative Investment Fund- Venture Capital
Fund
2. Category I Alternative Investment Fund- Social 152[Impact] Fund
3. Category I Alternative Investment Fund- SME Fund
4. Category I Alternative Investment Fund- Infrastructure Fund
5. Category I Alternative Investment Fund - Special Situation Fund
6. Category I Alternative Investment Fund- Other
7. Category II Alternative Investment Fund
8. Category III Alternative Investment Fund]
153
9. [Specified Alternative Investment Fund as provided under Regulation 19 of
these regulations: Corporate Debt Market Development Fund]
(e) In case the applicant proposes to register as a Category III Alternative Investment
Fund, whether the fund shall be open ended or close ended.
(f) Whether the applicant or its associates or its sponsor(s) or its manager(s) is/ are
registered with the Board, Reserve Bank of India or any other regulatory authority in
any capacity along with the details of its registration.
(g) Details of infrastructure for conducting activities as an Alternative Investment Fund
(h) Copy of the draft placement memorandum.
2. DETAILS OF APPLICANT
I. In case applicant is a Trust:
1. Write-up on the activities of the applicant
2. Whether the Trust Deed is registered under the provisions of the Registration
Act, 1908. (Enclose relevant extract of the Registered Trust Deed)
3. Whether the Trust Deed permits the carrying on of the activity of an
Alternative Investment Fund
4. Whether the applicant is prohibited by its trust deed from making an invitation
to the public to subscribe to its units;
5. Provide details of Trustees/ Trustee Company as below:
a. Whether Trustee is an individual or a Trustee company.
b. Name, registered office address, telephone number(s) and fax
number(s) of the Trustees/ Trustee Company.
151
152
Substituted for the word “venture” by the Securities and Exchange Board of India (Alternative Investment Funds)
(Third Amendment) Regulations, 2022, w.e.f. 25.07.2022.
153
c. Name, direct line number, mobile number and e-mail of the contact
person(s).
d. Identity and Address proof of Trustees/ Directors of the Trustee
Company
e. Whether the Trustee Company is registered with Board, Reserve Bank
of India or any other regulatory authority in any capacity along with the
details of its registration.
f. Brief write up on the activities of the Trustee Company/ Profile of
Trustees.
II. In case applicant is a Company:

2. Shareholding pattern and profile of the directors (Enclose Identity proof and
address proof of the directors)
3. Whether the Memorandum of Association permits carrying on of the activity of
an Alternative Investment Fund (Enclose relevant extract of the Memorandum
of Association)
4. Whether the applicant is prohibited by its memorandum and articles of
association from making an invitation to the public to subscribe to its
securities;
III. In case applicant is a limited liability partnership:

2. Beneficial ownership pattern and profile of the partners (Enclose Identity proof
and address proof of the partners)
3. Whether the partnership deed is 154[duly filed] under the provisions of the
Limited Liability Partnership Act, 2008 and permits carrying on of the activity
of an Alternative Investment Fund (Enclose relevant extract of the Partnership
Deed)
4. Whether the applicant is prohibited by its partnership deed from making an
invitation to the public to subscribe to its securities;
IV. In case applicant is a Body Corporate

2. Shareholding pattern and profile of the directors (Enclose Identity proof and
address proof of the directors)
3. Whether the applicant is set up or established under the laws of the Central or
State Legislature
154
Regulations, 2013, w.e..f 16-09-2013, for the words “duly registered”.
4. Whether the applicant is permitted carrying on of the activity of an Alternative
Investment Fund (Enclose relevant extract of the relevant Statute/Act)
5. Whether the applicant is prohibited by its memorandum and articles of
association from making an invitation to the public to subscribe to its
securities;
3. DETAILS OF SPONSOR(S) (Sponsor shall be as defined in 155[clause (w) of sub-

regulation (1) of regulation 2]),
(a) Name, address of registered office, address for correspondence and principal place of
business, telephone number(s), fax number(s), e-mail address of the sponsor.
(c) Legal status of the sponsor (whether sponsor(s) is/are individual/company/limited
liability partnership/body corporate) and date and place of incorporation/
establishment, wherever applicable.
(d) In case of Sponsor being individual(s), provide a brief profile of the Sponsor including
professional qualification. In case of Sponsor(s) being other than individual, write up
on shareholding pattern/ Partnership interests and profile of the directors/partners
including their professional qualification.
(e) Identity proof and address proof of the Sponsor (if sponsor is an individual)/ directors
of Sponsor(is sponsor is a company)/ partners of the Sponsor (if sponsor is an limited
liability partnership).
(f) Whether the Sponsor or its director(s)/ partner(s) is/are registered with the Board.
(g) Details of past experience of the Sponsor(s) in advising or managing pools of capital
or in fund or asset or wealth or portfolio management or in the business of buying,
selling and dealing of securities or other financial assets.
(h) Copies of the financial statements for the previous financial year
(i) Whether, the Sponsor has floated any Alternative Investment Funds/ Venture Capital
Funds previously, which are registered with the Board. If yes, details of the same.
4. DETAILS OF MANAGER
(a) Name, address of the registered office address for correspondence, telephone
number(s), fax number(s), of the Manager(s).
(c) Legal status of the Manager (whether Manager(s) is/are individual/company/limited
liability partnership/body corporate) and date and place of incorporation/
establishment, wherever applicable.
155
Regulations, 2013, w.e..f 16-09-2013, for the words, symbols and number “sub-regulation (w) of regulation 2”
(d) Write up on the activities of the Manager including past experience in advising or
managing pools of capital or in fund or asset or wealth or portfolio management or in
the business of buying, selling & dealing of securities or other financial assets.
(e) Identity proof and address proof of the Manager (if manager is an individual)/
directors of Manager (if manager is a company)/ partners of the Manager (if manager
is an limited liability partnership).
(f) In case of Manager being a company or limited liability partnership, shareholding
pattern /Partnership interests and profile of the directors /Partners
(g) Brief profile of Key Investment Team including experience and professional
qualification
(h) Copies of the financial statements for the previous financial year
(i) Whether, the Manager has managed/advised any Alternative Investment Funds/
Venture Capital Funds previously, which are registered with the Board. If yes, details
of the same.
5. DETAILS OF BUSINESS PLAN AND INVESTMENT STRATEGY
(a) Investment objective and investment style/ strategy of the fund.

(b) The target investors
(c) The target industries/ sectors, if any
(d) Proposed corpus
(e) Proposed fees to the Sponsor and Manager
(f) Tenure of the fund or scheme
(g) Details of proposed use of leverage in case of Category III Alternative Investment
Fund
6. DETAILS OF REGULATORY ACTION TAKEN IN THE PAST, IF ANY

(a) Whether the applicant or Sponsor or its directors/ partners or Manager or its Directors/
Partners or Trustees/ Trustee Company or its directors are/ were involved in any
litigation connected with the securities market and any order has/ had been passed
against them for violation of securities laws. (If Yes, provide details. If No, enclose a
declaration to that effect).
(b) Whether the applicant/ Sponsor/ Trustee/ Manager or its directors or Partners or
employees are / have been involved in any litigation connected with the securities
market which may have an adverse bearing on the business of the applicant or any
order has/ had been passed against them for violation of securities laws. (If Yes,
provide details. If No, enclose a declaration to that effect).
(c) Whether applicant/ Sponsor/ Trustee/ Manager or its directors or Partners has/ have
been refused a certificate by the Board or its/ their certificate has been suspended at
any time prior to this application. (If Yes, provide details. If No, enclose a declaration
to that effect).
7. OTHER INFORMATION/DECLARATIONS
(a) Amount contributed/ proposed to be contributed by the Sponsor(s)/Manager(s) as per

clause (d) of regulation 10 along with details of the same. (Provide copies of
commitment letters from the sponsor(s)/manager(s)).
(b) Whether the applicant, Sponsor and Manager are fit and proper persons based on the
criteria specified in the Securities and Exchange Board of India (Intermediaries)
Regulations, 2008; (Enclose a declaration to that effect).
(c) Declaration that the applicant shall comply with the provisions of regulation 10 with
respect to investment in the Alternative Investment Fund.
(d) Declaration that the applicant shall comply with the provisions of regulation 15 and 16
with respect to general investment conditions and conditions for the applicable
category.
DECLARATION STATEMENT (TO BE GIVEN AS BELOW)
We hereby agree and declare that the information supplied in the application, including the
attachment sheets, is complete and true.
AND we further agree that, we shall notify the Securities and Exchange Board of India
immediately any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange Board
of India Act, 1992, and the Securities and Exchange Board of India (Alternative Investment
Funds) Regulations, 2012, and Government of India guidelines/instructions as may be
announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by the Securities and Exchange Board of India from time
to time.
For and on behalf of____________________________________________________

(Name of the applicant)
Authorized signatory
(Signature)
FORM B
See regulation 6
Certificate of registration as Alternative Investment Fund
I. In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992), read with the regulations made
thereunder, the Board hereby grants a certificate of registration to
_______________________________________________________________
as an Alternative Investment Fund subject to the conditions specified in the Act and in
the regulations made thereunder.
II. The Category of the Alternative Investment Fund shall be -

__________________________________________.
III. The Registration Number of the Alternative Investment Fund is
IN/AIF/Category__/_____________.
Date :
Place : MUMBAI
By Order
Sd/-
For and on behalf of

______________________________________________________________________
SECOND SCHEDULE
See sub-regulations (2) and (5) of regulation 3, sub-regulation (2) of regulation 6 and sub-
regulation (2) of regulation 12
FEES
156
[PART A
AMOUNT TO BE PAID AS FEES
Application fee `1,00,000

Registration fee for Category I Alternative ` 5,00,000
Investment Funds other than Angel Funds
Registration fee for Category II Alternative `10,00,000
Registration fee for Category III Alternative `15,00,000
Scheme Fee for Alternative Investment `1,00,000
Funds other than Angel Funds
Re-registration Fee `1,00,000
Registration Fee for Angel Funds ` 2,00,000
156
Substituted by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014,
(w.e.f 23.05.2014). Prior to its substitution, the Second Schedule, Part A as amended by the Securities and
Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013, w.e.f. 16-09-2013, read
as under:
"PART A
AMOUNT TO BE PAID AS FEES

Application fee `` 1,00,000
Registration fee for Alternative Investment Funds ` ` 5,00,000
other than Angel Funds
Registration fees for Angel Funds ` 2,00,000
Scheme Fee for Alternative Investment Funds other ` 1,00,000
than Angel Funds
Re-registration Fee ` 1,00,000
[Registration fee for Corporate Debt Market ₹5,00,000]
Development Fund (specified Alternative
Investment Fund as provided under
Regulation 19 of these regulations)
]
PART B
157
[The fees specified above shall be payable by way of direct credit into the bank account
through NEFT/RTGS/IMPS or online payment using the SEBI Payment Gateway or any other
mode as may be specified by the Board from time to time.]
___________________________________________________________________
157
Substituted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023, w.e.f 01-04-
2023. Prior to its substitution, it read as under:
“The fees specified above shall be payable *[by way of direct credit in the bank account through NEFT/RTGS/IMPS
or any other mode allowed by RBI or] by bank draft in favour of “The Securities and Exchange Board of India” at
Mumbai.”
*[Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, w.e.f. 6-3-2017.]
Third Schedule
[see regulation 38]
1. Amendment to Securities and Exchange Board of India (Issue of Capital and
Disclosure) Regulations, 2009.
(i) In regulation 2, in sub-regulation (1), in clause (zd),in sub-clause (i) after the words
“venture capital fund” and before the words “and”, the words “, Alternative
Investment Fund” shall be inserted;
(ii) In regulation 37, in the proviso, clause (b) shall be substituted with the following
namely, —
“(b) equity shares held by a venture capital fund or alternative investment fund of
category I or a foreign venture capital investor:
Provided that such equity shares shall be locked in for a period of at least one year
from the date of purchase by the venture capital fund or alternative investment fund
or foreign venture capital investor.”
2. Amendment to Securities and Exchange Board of India (Foreign Venture Capital

Investors) Regulations, 2000, -
(i) In regulation 2,
(a) clause (l) shall be substituted with the following namely, —
“(l) “Venture Capital Fund” means a fund registered with the Board under the
Securities and Exchange Board of India (Venture Capital Funds) Regulations,
1996 or under the Securities and Exchange Board of India (Alternative
Investment Funds) Regulations, 2012 in the sub-category of “Venture Capital
Fund’ under Category I Alternative Investment Fund.”
(b) clause (m) shall be substituted with the following namely, —

“(m) “Venture Capital undertaking” means a venture capital undertaking as
defined under clause(aa) of sub-regulation (1) of regulation 2 of the Securities
and Exchange Board of India (Alternative Investment Funds) Regulations,
2012.”
(c) In sub-regulation (2), after the words “Securities and Exchange Board of India
(Venture Capital Funds) Regulations, 1996” the words and numbers “or
Securities and Exchange Board of India (Alternative Investment Funds)
Regulation, 2012” shall be inserted.
(ii) In regulation 4, in sub-regulation (1), clause (e) after the words “venture capital
fund” the words “or Alternative Investment Fund” shall be inserted:
(iii) In regulation 11, in clause (b), after the words “venture capital fund”, the words “or
alternative investment fund” shall be inserted;
(iv) In regulation 11, in clause (c), the words “venture capital undertaking” wherever
occurring shall be replaced with the words “venture capital undertaking or investee
company as defined in clause (o) of sub-regulation (1) of regulation 2 of Securities and
Exchange Board of India (Alternative Investment Funds) Regulation, 2012”.
3. Amendments to Securities and Exchange Board of India (Substantial Acquisitions of

Shares and Takeover) Regulations, 2011.
(i) In regulation 2, in sub-regulation (1), in clause (q),in sub-clause (2) after item (viii)
the following new item shall be inserted namely, —
“(viiia) an alternative investment fund and its sponsor, trustees, trustee company and
manager;”
(ii) In regulation 10, in sub-regulation (4), in clause (f) the words “venture capital fund”
wherever occurring shall be replaced with the words “venture capital fund or
Category I Alternative Investment Fund”.
158[Fourth Schedule
SEBI (Alternative Investment Funds) Regulations, 2012
[Regulation 20(1) and 20(9)]
1. Code of Conduct for Alternative Investment Funds

An Alternative Investment Fund shall:
(a) carry out its business activities and invest in accordance with the investment
objectives stated in the placement memorandum and other fund documents.
(b) be operated and managed in the interest of all investors and not only in the
interest of the sponsor, manager, directors or partners of the sponsor and manager or a
select class of investors.
(c) ensure the dissemination of adequate, accurate, explicit and timely information in
accordance with these Regulations to all investors.
(d) ensure the dissemination of any other information as agreed with the investors.
(e) ensure that an effective risk management process and appropriate internal controls
are in place.
158
Regulations, 2021, w.e.f. 05-05-2021.
(f) have written policies and procedures to identify, monitor and appropriately
mitigate any potential conflict of interest through-out the scope of its business.
(g) not use any unethical means to sell, market or induce any investor to buy its units.
(h) have written policies and procedures to comply with anti-money laundering laws.
2. Code of Conduct for the Managers of Alternative Investment Funds and key
management personnel of Managers and Alternative Investment Funds
Every Manager of Alternative Investment Funds and key management personnel of the
manager and Alternative Investment Funds shall:
(a) abide by the Act, Rules, Regulations, Guidelines and Circulars as applicable to
Alternative Investment Funds at all times;
(b) maintain integrity, highest ethical and professional standards in all its dealings;
(c) ensure proper care and exercise due diligence and independent professional
judgment in all its decisions;
(d) act in a fiduciary capacity towards investors of the Alternative Investment Fund
and ensure that decisions are taken in the interest of the investors;
(e) abide by the policies of the Alternative Investment Fund to identify, monitor and
appropriately mitigate any potential conflict of interest throughout the scope of its business;
(f) not make any misleading or inaccurate statement, whether oral or written, either
about their qualifications or capability to render investment management services or their
achievements;
(g) record in writing, the investment, divestment and other key decisions, together
with appropriate justification for such decisions;
(h) provide appropriate and well considered inputs, which are not misleading, as
required by the valuer to carry out appropriate valuation of the portfolio;
(i) not enter into arrangements for sale or purchase of securities, where there is no
effective change in beneficial interest or where the transfer of beneficial interest is only
between parties who are acting in concert or collusion, other than for bona fide and legally
valid reasons;
(j) abide by confidentiality agreements with the investors and not make improper use
of the details of personal investments and/or other information of investors;
(k) not offer or accept any inducement in connection with the affairs of or business of
managing the funds of investors;
(l) document all relevant correspondence and understanding during a deal with
counterparties as per the records of the Alternative Investment Fund, if they have
committed to the transactions on behalf of Alternative Investment Fund;
(m) maintain ethical standards of conduct and deal fairly and honestly with investee
companies at all times; and
(n) maintain confidentiality of information received from investee companies and
companies seeking investments from Alternative Investment Fund, unless explicit
confirmation is received that such information is not subject to any non-disclosure
agreement.
3. Code of Conduct for members of the Investment Committee, trustee, trustee

company, directors of the trustee company, directors or designated partners of the
Alternative Investment Fund
Members of the Investment Committee, trustee, trustee company, directors of the trustee
company, directors or designated partners of the Alternative Investment Fund shall:
(a) maintain integrity and the highest ethical and professional standards of conduct;
(b) ensure proper care and exercise due diligence and independent professional
judgment in carrying out their roles;
(c) disclose details of any conflict of interest relating to any/all decisions in a timely
manner to the Manager of the Alternative Investment Fund, adhere with the policies and
procedures of the Alternative Investment Fund with respect to any conflict of interest and
wherever necessary, recuse themselves from the decision making process;
(d) maintain confidentiality of information received regarding the Alternative
Investment Fund, its investors and investee companies; unless explicit confirmation is
received that such information is not subject to any non-disclosure agreement.
(e) not indulge in any unethical practice or professional misconduct or any act,
whether by omission or commission, which tantamount to gross negligence or fraud.]
*********

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THE GAZETTE OF INDIA

SECURITIES AND EXCHANGE BOARD OF INDIA

LAD-NRO/GN/2012-13/04/11262. — In exercise of the powers conferred by sub-section (1) of

Short title and commencement.

(ab) “accredited investor” means any person who is granted a certificate of

(i) in case of an individual, Hindu Undivided Family, family trust or sole

(i) is a privately pooled investment vehicle which collects funds from

Provided that the following shall not be considered as Alternative Investment

(vi) funds managed by securitisation company or reconstruction company

(c) “associate” means a company or a limited liability partnership or a body corporate

(e) “certificate” means a certificate of registration granted by the Board under

(i) in case of a body corporate –

Provided that Co-investment by investors of Alternative Investment Fundshall be

(m) “infrastructure fund” means an Alternative Investment Fund which invests

(pc) “liquidation scheme” means a close ended scheme launched by an Alternative

(i) public charitable trusts registered with Charity Commissioner;

(ii) societies registered for charitable purposes or for promotion of science,

(iv) micro finance institutions;

REGISTRATION OF ALTERNATIVE INVESTMENT FUNDS

Registration of Alternative Investment Funds.

(3) activities not permitted under industrial policy of Government of India;

(a) “Category I Alternative Investment Fund” which invests in start-up or early

Explanation.─ For the purpose of this clause, Alternative Investment Funds

Explanation.─ For the purpose of this clause, Alternative Investment Funds

Procedure for grant of Certificate.

INVESTMENT CONDITIONS AND RESTRICTIONS

Investment in Alternative Investment Fund.

(2) Such information or placement memorandum as specified in sub-regulation (1) shall

General Investment Conditions.

(a) Alternative Investment Fund may invest in securities of companies incorporated

(b) units of Alternative Investment Funds managed or sponsored by its Manager,

Conditions for Category I Alternative Investment Funds.

Regulations, 2023, w.e.f 09-01-2023.

(a) atleast seventy five percent of the 95[investable funds] shall

Conditions for Category II Alternative Investment Funds.

Conditions for Category III Alternative Investment Funds.

Regulations, 2023, w.e.f 09-01-2023.

Other Alternative Investment Fund.

(i) has early stage investment experience, or

(ii) has experience as a serial entrepreneur, or

(iii) is a senior management professional with at least ten years of experience;

(3) "company with family connection" means:

a. if the angel investor is an individual,

i. any company which is promoted by such an individual or his relative; or

ii. any company where the individual or his relative is a director; or

b. if the angel investor is a body corporate,

Registration of angel funds.

Investment in angel funds.

than twenty five lakh rupees from an angel investor.

Investment by Angel Funds.

period of 125[one year].

(4) Angel funds shall not invest in associates.

all its schemes in one venture capital undertaking:

the end of its tenure.

Obligations of Sponsors and Managers of Angel Fund.

(2) “special situation asset” includes,-

Registration of special situation funds.

Investment in special situation funds.

Investment by special situation funds.