Introduction
The Securities and Exchange Board of India (“SEBI”) released updated FAQs for ‘Grant of registration of an Alternative Investment Fund (AIF) & taking on record the Private Placement Memorandum (PPM) of the scheme’ (“2025 FAQs”) (accessible here) recently. Vide the 2025 FAQs, SEBI has made revisions to information/documents/declarations required to be submitted along with applications for registration of an AIF/ taking on record the PPM of the schemes of AIF.
As per the 2025 FAQs, applicants will be required to pay the requisite application fee by online mode through the SEBI Intermediary Portal (“SI Portal”). Further, while paying the application/registration fee to SEBI, the exact amount needs to be tendered (including paisa), without rounding off, failing which amount may be rejected by the system.
The key revisions brought about by the 2025 FAQs have been listed below:
1. Key additional documents/information required to be provided by the applicant
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- Similar to the requirement applicable while seeking registration as an AIF, applicants seeking to launch schemes will also be required to henceforth provide an undertaking from the trustee/ designated partners/board of directors of the AIF (depending on the legal form of the AIF), as per Annexure B of the 2025 FAQs.
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- At the time of filing an application for registration as an AIF, the 2025 FAQs now require the applicant to provide separate fit and proper declarations for each of the directors/partners of (i) the AIF (ii) the trustee, (iii) sponsor and (iv) the investment manager of the AIF. Under the erstwhile FAQs for ‘Grant of registration of an Alternative Investment Fund’ (last updated in January 2024) (“2024 FAQs”), there was no express requirement to provide separate declarations for the directors and partners of the aforementioned entities.
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- Reduction in thresholds applicable to certain declarations to be submitted at the time of filing an application for registration as an AIF: The threshold requirements applicable to certain disclosures have been revised as follows:
- i. Under the 2024 FAQs, while disclosing the details of shareholders/partners of the sponsor and the manager, in case the shareholder/partner of the manager or sponsor is a non-individual, further details of entities holding 15% or more in such shareholder/partner had to be provided, the 2025 FAQs have reduced this threshold to 10%. This update is in line with the current requirements under the Prevention of Money Laundering norms for identifying the Ultimate Beneficial Owner (UBO).
- ii. Under the 2024 FAQs, the applicants were required to disclose whether the sponsor, manager or their shareholders/partners with shareholding / voting rights / partnership interest of 20% or more, are registered with RBI, IRDA, PFRDA or any other financial regulator, the 2025 FAQs have reduced this threshold to 10%.
- iii. While providing information with respect to controlling entities / persons, key management person(s), key investment team etc, the applicant will be required to disclose the names of person(s) holding 10% or more (a) shareholding/ partnership interest and (b) voting rights /controlling interest, thereby replacing the previous threshold of 20%.
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- The 2025 FAQs no longer require the applicant applying for an AIF registration to provide information with respect to associates and group companies of the applicant, sponsor and the manager. Under the 2024 FAQs, the applicant was required to disclose:
- i. the names of such specified entities;
- ii. the nature of their relation to the applicant/sponsor/investment manager; and
- iii. details of their registration with the RBI, PFRDA, IRDAI or any other financial regulator.
2. Additions to the checklist for registration of an AIF that is enclosed with the undertaking to be submitted by the trustee/board of directors/designated partners of the applicant, for registration of the AIF (collectively referred to as “Annexure A”)
With respect to the disclosures to be made in the aforesaid checklist, the following may be noted:
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- The applicant will now be required to also disclose whether any person controlling 10% or more directly / indirectly in the sponsor or manager is/ are registered with SEBI, RBI or any other regulatory authority in any capacity. If yes, details of such registration will also need to be provided.
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- The applicant will now be required to also provide the details of (a) other AIFs/VCFs floated by any person controlling 10% or more directly / indirectly in the sponsor; and (b) other AIFs/VCFs managed by any person controlling 10% or more directly / indirectly in the manager. Under the 2024 FAQs, only details of other AIFs/VCFs floated/managed by the sponsor/manager respectively had to be disclosed.
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- The excel file containing the Permanent Account Numbers (PAN) of the specified persons (which is submitted at the time of AIF registration) will also need to contain the PAN number of the compliance officer of the manager of the AIF, along with the date of birth/date of incorporation (as applicable) of all the specified persons.
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- The declaration provided by the sponsor, manager and trustee of the AIF under Form A, will need to additionally disclose:
- i. Whether any person controlling 10% or more directly / indirectly in the sponsor or manager (a) are/ were involved in any litigation connected with the securities market; and (b) whether any order has/ had been passed against them for violation of securities laws.
- ii. Whether any person controlling 10% or more directly / indirectly in the sponsor or manager, or trustee/ trustee company or its directors has been suspended at any time prior to the application.
- iii. Whether any person controlling 10% or more directly / indirectly in the sponsor or the manager has earlier been refused registration by SEBI.
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- The applicant will also be required to disclose the controlling structure of the sponsor and manager, up to its UBOs, at the time of making the application.
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- If the manager is owned or controlled by persons resident in India then, the manager is required to disclose whether any member of investment committee is / proposed to be non-resident/ citizens of country other than India and details of the same, and whether such member is an employee, director or partner of the manager of the AIF.
3. Additions to the information checklist with respect to disclosures in the PPM that is enclosed with the undertaking to be submitted by the trustee/board of directors/designated partners of the applicant for taking the PPM of the scheme on record (collectively referred to as “Annexure B”)
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- Whether the AIF has shared the data pertaining to its previous schemes, in terms of the applicable law, as and when asked by the performance benchmarking agencies? If so, the names of the agency (ies) and latest dates of communication made to these agencies may be provided.
Applicants should take cognisance of the new FAQs while making AIF/scheme applications to ensure all documents are submitted and lack of documentation does not result in a delay in processing of applications.
Authors: Harsh Kothari (Principal Associate), Siddhanth Sharma (Associate)
(Funds, Asset Management and Regulatory Practice)
Disclaimer:
This document has been created for informational purposes only. Neither IC RegFin Legal nor any of its partners, associates or allied professionals shall be responsible/liable for any interpretational issues, incompleteness/ inaccuracy of the information contained herein. This document is intended for non-commercial use and for the general consumption of the reader and should not be considered as legal advice or legal opinion of any form and may not be relied upon by any person for such purpose.
