Master Circular for Alternative Investment Funds

[Image omitted. See the official document.]

MASTER CIRCULAR

HO/19/34/11(6)2025-AFD-POD1/I/12928/2026

Issued on: June 03, 2026
Last updated on: November 05, 2026

To,

All Alternative Investment Funds
All Custodians
All Depositories
All Registrar to an Issue and Share Transfer Agents

Dear Sir/Madam,

Sub: Master Circular for Alternative Investment Funds (AIFs)

1. For effective regulation of Alternative Investment Funds (AIFs), the Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable AIFs and other market stakeholders to have access to all applicable Circulars in the subject matter at one place, SEBI’s Master Circular No. SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/39 for AIFs dated May 07, 2024 was issued as a compilation of such relevant circulars issued under SEBI (Alternative Investment Funds) Regulations, 2012 up to March 31, 2024.

2. Subsequently, various circulars have been issued by SEBI under SEBI (Alternative Investment Funds) Regulations, 2012. The provisions of such circulars issued till May 31, 2026 have been incorporated in this Master Circular, which supersedes the Master Circular for AIFs dated May 07, 2024.

3. Further, this Master Circular has been updated to incorporate the provisions of the following circulars –

4. With the issuance of this Master Circular, all directions/instructions contained in the circulars listed out in Annexure 24 to this Master Circular shall stand rescinded to the extent they relate to AIFs.

5. Notwithstanding such rescission:

• a) anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular;
• b) any application made to SEBI under the rescinded circulars prior to such rescission, and pending before it, shall be deemed to have been made under the corresponding provisions of this Master Circular; and
• c) the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall not be affected by such rescission and shall be enforceable as if the rescinded circulars had continued to be in force.

6. The trustee / sponsor / manager of AIF, as the case may be, shall ensure that the ‘Compliance Test Report’ prepared by the manager of the AIF, in terms of para 21.2 of this Master Circular, includes compliance with the provisions of all chapters of this Master Circular.

7. This Master Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.

8. This Master Circular is available on SEBI website at www.sebi.gov.in in the path "Legal $\rightarrow$ Master Circulars" and "Info for $\rightarrow$ Alternative Investment Funds".

Yours sincerely,

Anshul Goyal
Deputy General Manager
Tel no.: +91-22-2644 9389
anshulg@sebi.gov.in

---

[Image omitted. See the official document.]

INDEX

LIST OF ABBREVIATIONS ................................................................................................................6

A. REGISTRATION AND LAUNCH OF AIF SCHEMES

Chapter 1 - Requirements and clarifications pertaining to registration of AIFs ...........................7

Chapter 2 - Filing of PPM for launch of AIF scheme .....................................................................10

B. FUND RAISING BY AIFs

Chapter 3 - On-boarding of investors by AIFs................................................................................17

C. INVESTMENTS BY AIFs

Chapter 4 - Investment instrument/security specific conditions for AIFs ....................................20

Chapter 5 - Guidelines for overseas investments by AIFs and related reporting.........................24

Chapter 6 - Framework for AIFs to make co-investment within the AIF structure ...................27

D. INVESTMENT CONDITIONS AND OTHER NORMS FOR SPECIFIC CATEGORIES / SUB-CATEGORIES OF AIFs

Chapter 7 - Operational and prudential norms for Category III AIFs.........................................29

Chapter 8 - Operational and prudential norms for Angel Funds..................................................34

Chapter 9 - Norms for Special Situation Funds...............................................................................38

E. ACCREDITATION OF INVESTORS

Chapter 10 - Framework for Accreditation of Investors..............................................................39

F. OPERATIONAL MODALITIES

Chapter 11 - Dematerialisation of units and investments of AIFs and collection of stamp duty on units of AIFs ………………………………………………………………………………………..47

Chapter 12 - Timeline for first close and calculation of tenure of AIFs......................................52

Chapter 13 - Material change and change in Sponsor or Manager of AIFs...............................54

Chapter 14 - Guidelines for Category I and II AIFs on borrowing and creation of encumbrance on equity of investee companies....................................................................................57

Chapter 15 - Guidelines with respect to excusing or excluding an investor from an investment of AIF ………………………………………………………………………………………...60

Chapter 16 - Direct plan for schemes of AIFs and trail model for distribution commission in AIFs ………………………………………………………………………………………..61

G. GOVERNANCE NORMS AND OBLIGATIONS

Chapter 17 - Obligations of manager, sponsor, investment committee and trustee of AIFs.....62

Chapter 18 - Standardised approach to valuation of investment portfolio of AIFs...................65

Chapter 19 - Pro-rata and pari-passu rights of investors of AIFs...............................................68

Chapter 20 - Specific due diligence of investors and investments of AIFs..................................72

H. REPORTING AND DISCLOSURE REQUIREMENTS FOR AIFs

Chapter 21 - Periodic reporting requirements for AIFs...............................................................76

Chapter 22 - Performance Benchmarking of AIFs .......................................................................80

I. WINDING UP OF SCHEMES AND FACILITIES FOR DEALING WITH UNLIQUIDATED INVESTMENTS

Chapter 23 - Flexibility to AIFs and their investors to deal with unliquidated investments of their schemes ………………………………………………………………………………………...84

Chapter 24 - Modalities for migration of Venture Capital Funds to AIF Regulations..............92

Chapter 25 - Guidelines for winding up of AIFs with respect to retention of proceeds.............94
and ‘Inoperative Fund’ status...............................................................................................................94

ANNEXURES

Annexure 1 - Template for PPM for Category I and Category II AIFs ...........................................97

Annexure 2 - Template for PPM for Category III AIFs.....................................................................98

Annexure 3 - Template for waiver of compliance with SEBI prescribed template of PPM and audit compliance with the terms of PPM.............................................................................................99

Annexure 4 - Investor Charter for Alternative Investment Funds .................................................100

Annexure 5 - Complaints Data to be displayed by AIFs for each scheme ......................................105

Annexure 6 - Format for Due Diligence Certificate to be submitted at the time of filing PPM with SEBI ...................................................................................................................................................106

Annexure 7 - Format for undertaking to be submitted for filing PPM of AI only funds or LVFs or Angel Funds with SEBI.......................................................................................................................115

Annexure 8 - Information to be submitted while filing application for allocation of overseas investment limit....................................................................................................................................119

Annexure 9 - Information with respect to sale/divestment of overseas investment.......................122

Annexure 10 - Template for shelf placement memorandum to be filed for CIV schemes ............123

Annexure 11 - List of Documents to be submitted for accreditation ..............................................124

Annexure 12 - Format of waiver to be provided by investors in respect of responsibility of investment committee members .........................................................................................................125