On 4th July 2022, SEBI introduced changes in the Investor Grievance Redressal Mechanism for Sto...
The Alternative Investment Fund or AIFs acts as a privately pooled investment vehicle wherein the funds collected from specified investors are invested in accordance with a pre-determined investment policy. They are different from conventional investments such as fixed-income securities or equities. SEBI regulates the Alternative Investment funds in India in accordance with the SEBI (AIF) Regulations 2012 which aim at regulating the activities of unregulated privately pooled investment undertaken through the Alternative Investment Route. The said regulation has undergone various amendments from the date of its effect; SEBI issued one such amendment on 15th November 2022, which brings new provisions for the declaration of first close of schemes, calculation of tenure & change of sponsor or manager and change in control of sponsor or manager. Therefore, to provide more details on the said provisions, the SEBI has issued a circular “Guidelines for AIFs for declaration of first close, calculation of tenure & change of sponsor or manager or change in control of sponsor or manager” on 17th November 2022 which is discussed in the later part of this article.
The regulation-12 (4) of the amended SEBI (AIF) regulation 2012 provides that the Alternative Investment Fund shall declare the first close of the scheme in the manner specified by SEBI from time to time. Henceforth, in relation to the declaration of first close of scheme, the following provisions are specified by the SEBI under the guidelines:
Payment of requisite fee in case of non-declaration: Moreover, if the first close of scheme is not declared within the timeline provided above, in that case, the AIF can file a fresh application for the launch of scheme in the manner prescribed under regulation by the payment of a requisite fee.
The regulation-13 (4) of the amended SEBI (AIF) regulation 2012 provides that the manner of calculation and modification of the tenure for closed ended scheme of AIF may be specified by SEBI at such intervals. Henceforth, in relation to the tenure, the following provisions are specified by the SEBI under the guidelines:
The regulation-20 (13) of the amended SEBI (AIF) regulation 2012 provides that the AIF shall take approval from the board before making any changes in manager or sponsor or change in control of the manager or sponsor and subject to the payment of requisite fee & conditions specified by SEBI at such intervals. Henceforth, in relation to change, the following provisions are specified by the SEBI under the guidelines:
Exemption for Fee: The fee shall not be levied in the following cases:
a. The manager is replacing or acquiring control of the sponsor.
b. The sponsors exit due to the existence of multiple accounts.
Time-Period for payment of fee: The fee shall be paid within 15 days from the date of change in manager or sponsor or change in control of manager or sponsor.
The guidelines on timeline for declaration of first close, calculation of tenure of close ended scheme and change in manager or sponsor or change in control of manager or sponsor shall come into force with immediate effect. The SEBI, through this circular, has made it mandatory that the AIF shall declare its first close of scheme within 12 months from the date of communication to SEBI about its PPM. Further, the tenure for the close ended scheme shall be calculated from the date of declaration of its first close. Moreover, any change in the manager or sponsor or change in the control of the manager or sponsor shall attract a fee equivalent to the registration fee of AIF.1668689142346