{"id":90679,"date":"2026-06-10T18:13:32","date_gmt":"2026-06-10T12:43:32","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=90679"},"modified":"2026-06-10T18:13:37","modified_gmt":"2026-06-10T12:43:37","slug":"sebi-aif-master-circular-new-compliance-rules-and-changes","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-aif-master-circular-new-compliance-rules-and-changes\/","title":{"rendered":"SEBI AIF Master Circular 2026: Complete Guide to New Compliance Rules and Changes"},"content":{"rendered":"<p>The Indian capital <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> has changed significantly over the last ten years. Earlier, most investments were limited to banks, FDs, or the stock market. But now big investors are investing money in new ways. Among those new ways, Alternative Investment Funds (AIFs) have become&nbsp;very popular.&nbsp;<\/p>\n\n\n\n<p>AIFs raise capital from large investors and invest in startups, infrastructure, real estate, private equity, and other assets. AIFs work on things that are not possible in general banking products.&nbsp;<\/p>\n\n\n\n<p>As this sector grew, the rules also became complicated.&nbsp;Compliance with different SEBI circulars used to be confusing at times.&nbsp;SEBI&nbsp;came up with&nbsp;a new&nbsp;<strong><a href=\"https:\/\/www.sebi.gov.in\/legal\/master-circulars\/jun-2026\/master-circular-for-alternative-investment-funds-aifs-_101817.html\">Master&nbsp;Circular for AIFs in 2026<\/a><\/strong>&nbsp;to solve this problem. All the rules have been brought together in one place.&nbsp;<\/p>\n\n\n\n<p>This blog explains the key updates,&nbsp;<strong><a href=\"https:\/\/enterslice.com\/aif-compliance-in-india\">AIF&nbsp;compliance<\/a><\/strong>&nbsp;changes, and the real impact of this new circular.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is the SEBI Master Circular for AIFs 2026?&nbsp;<\/h2>\n\n\n\n<p>The SEBI Master Circular for AIFs 2026 is a&nbsp;consolidated&nbsp;regulatory document. The earlier separate circulars related to AIFs have been&nbsp;consolidated&nbsp;together and made into a new unified guide.&nbsp;<\/p>\n\n\n\n<p>SEBI issued it on 3 June 2026. This new circular replaces the&nbsp;previous&nbsp;master circular of May 7, 2024. It is no longer the primary reference. It has&nbsp;consolidated&nbsp;all the AIF-related circulars till 31 May 2026.&nbsp;<\/p>\n\n\n\n<p><strong>This circular covers all types of AIFs in India<\/strong>:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Category I AIF&nbsp;<\/li>\n\n\n\n<li>Category II AIF&nbsp;<\/li>\n\n\n\n<li>Category III AIF&nbsp;<\/li>\n\n\n\n<li>Fund managers&nbsp;<\/li>\n\n\n\n<li>Trustees&nbsp;<\/li>\n\n\n\n<li>Sponsors&nbsp;<\/li>\n\n\n\n<li>Custodians and other intermediaries&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><strong>Main&nbsp;objective:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>To bring all compliance rules in one place&nbsp;<\/li>\n\n\n\n<li>To reduce confusion&nbsp;<\/li>\n\n\n\n<li>To simplify reporting and regulation&nbsp;<\/li>\n\n\n\n<li>To create clear guidelines for fund managers&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Now, you&nbsp;don&rsquo;t&nbsp;have to look for separate circulars.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the&nbsp;Key Compliance Changes Introduced in 2026?&nbsp;<\/h2>\n\n\n\n<p>SEBI has brought some major changes in the AIF sector in 2026. These changes have been&nbsp;mainly brought&nbsp;to increase transparency, strengthen investor protection, and simplify the reporting system. They are explained in simple terms below.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Fundraising &amp; Investor Protection Rules&nbsp;<\/h3>\n\n\n\n<p>AIF fundraising rules have now become much stricter. In this, assured returns have been completely banned. No fund manager or sponsor can promise fixed returns anymore.&nbsp;<\/p>\n\n\n\n<p>In addition, it is now mandatory to show a Private Placement Memorandum (PPM) before taking an&nbsp;investor&rsquo;s&nbsp;commitment. The investor must acknowledge in writing that he is investing with an understanding of the risk.&nbsp;<\/p>\n\n\n\n<p>Strict rules have also come into the field of marketing. AIFs cannot carry out open\/public marketing. Only&nbsp;eligible&nbsp;investors can be approached on a private placement <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>. These changes have been brought to increase investor protection.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">PPM &amp; Disclosure Framework&nbsp;<\/h3>\n\n\n\n<p>PPM has now been made more structured. Now, PPM will be in two parts: Part A and Part B&nbsp;<\/p>\n\n\n\n<p><strong>Part A:&nbsp;<\/strong>Itwill&nbsp;contain&nbsp;all the mandatory information&nbsp;<\/p>\n\n\n\n<p><strong>Part B:<\/strong>&nbsp;It will provide&nbsp;additional&nbsp;information if the fund wants&nbsp;<\/p>\n\n\n\n<p>Some mandatory things to be added to PPM:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Example of a distribution waterfall&nbsp;<\/li>\n\n\n\n<li>Disciplinary history of the last 5 years&nbsp;<\/li>\n\n\n\n<li>Investor Charter&nbsp;<\/li>\n\n\n\n<li>Large Value Funds (LVFs) have been given an exemption but are subject to certain conditions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Reporting &amp; Overseas Investment Timelines&nbsp;<\/h3>\n\n\n\n<p>SEBI has now made the reporting system much faster and stricter.&nbsp;<\/p>\n\n\n\n<p>New timeline for overseas investment:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Investment&nbsp;utilization&nbsp;report<\/strong>&nbsp;&rarr; 5 working days&nbsp;<\/li>\n\n\n\n<li><strong>Non-utilization&nbsp;or surrender<\/strong>&nbsp;&rarr; 2 working days&nbsp;<\/li>\n\n\n\n<li><strong>Divestment report<\/strong>&nbsp;&rarr; 3 working days&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>All reports will now have&nbsp;to be filed\/submitted&nbsp;through the SEBI Intermediary Portal. Earlier, there were a lot of delays or manual processing. Now that has stopped.&nbsp;Fund managers now have to maintain real-time compliance with strict rules.&nbsp;Even&nbsp;a little delay&nbsp;can lead to regulatory action.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Co-investment &amp; CIV Framework&nbsp;<\/h3>\n\n\n\n<p>SEBI has now introduced a formal framework for co-investment. It was not very structured earlier. The new system is called the Co-Investment Vehicle (CIV).&nbsp;<\/p>\n\n\n\n<p>Key features are:&nbsp;<\/p>\n\n\n\n<ul>\n<li>A separate bank account is to be&nbsp;maintained&nbsp;for each CIV&nbsp;<\/li>\n\n\n\n<li>A separate demat account is mandatory&nbsp;<\/li>\n\n\n\n<li>Investor assets will be ring-fenced (risk of one fund will not go to another fund)&nbsp;<\/li>\n\n\n\n<li>Leverage cannot be used in the CIV structure&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>This system increases investor protection. Co-investment has now become more transparent and regulated.&nbsp;Informal co-investment arrangements&nbsp;have now come under the proper SEBI structure.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">New Registration &amp; Certification Requirements&nbsp;<\/h2>\n\n\n\n<p>As per the SEBI 2026 Master Circular,&nbsp;<strong><a href=\"https:\/\/enterslice.com\/alternative-investment-fund-registration\">AIF registration<\/a><\/strong>&nbsp;has now become much more structured and stricter than before. Now, all applications must be made through the SEBI Intermediary Portal. Registration cannot be done offline or by any other means.&nbsp;This&nbsp;has made the entire process more transparent, but compliance discipline has increased a lot.&nbsp;<\/p>\n\n\n\n<p>Fund managers, sponsors, and key personnel all now have to fulfil &ldquo;fit and proper&rdquo; criteria.&nbsp;Their financial integrity, past record, and professional credibility must be good. SEBI is now verifying these very strictly.&nbsp;<\/p>\n\n\n\n<p>In addition, the Key Investment Team (KIT) certification has been newly made mandatory. This ensures that the people who take the investment decisions of the fund are&nbsp;properly trained&nbsp;and qualified.&nbsp;<\/p>\n\n\n\n<p>NISM certification is now a major requirement:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Category I &amp; II AIF:<\/strong>&nbsp;NISM Series-XIX-C \/ XIX-D&nbsp;<\/li>\n\n\n\n<li><strong>Category III AIF:&nbsp;<\/strong>NISM Series-XIX-C \/ XIX-E&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>It is mandatory to&nbsp;submit&nbsp;PAN, identity proof, and other KYC documents. All these certifications and eligibility must be in place before launching the scheme. The approval&nbsp;may not be granted if&nbsp;the KIT certification or fit&nbsp;and proper conditions are not met. So, proper compliance readiness is&nbsp;very important&nbsp;before registration.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Revised AIF Scheme Launch &amp; PPM Filing Rules&nbsp;<\/h2>\n\n\n\n<p>SEBI has now made the process of launching AIF schemes much more structured. Now, to launch a scheme, a Private Placement Memorandum (PPM) must be filed first through a SEBI-<strong><a href=\"https:\/\/enterslice.com\/merchant-bankers-license-in-india\">registered merchant banker<\/a><\/strong>.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Now, a 30-day fast-track system has been introduced. If SEBI does not raise any objection within 30 days of filing the PPM, then the scheme can be launched. However, it must be launched after receiving SEBI registration or after 30 days for the first scheme.&nbsp;<\/p>\n\n\n\n<p>PPM now must be prepared in a standard format:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Annexure 1:<\/strong>&nbsp;Category I &amp; II AIF&nbsp;<\/li>\n\n\n\n<li><strong>Annexure 2:&nbsp;<\/strong>Category III AIF&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>This template is mandatory; the structure has been made uniform. There is a separate handling process when a material change occurs in the PPM. Proper disclosure and approval processes must be followed again for a change.&nbsp;<\/p>\n\n\n\n<p>Merchant bankers now have to be independent.&nbsp;They cannot be directly connected with the AIF sponsor, manager, or trustee. This entire system increases due diligence and ensures risk control before launching.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Updated Investment &amp; Portfolio Norms&nbsp;<\/h2>\n\n\n\n<p>SEBI has now made the investment rules of AIF more flexible but controlled. AIF can now invest in other AIFs, but proper disclosure must be given for this.&nbsp;The PPM must&nbsp;disclose&nbsp;where, how much, and how the investment will be made.&nbsp;<\/p>\n\n\n\n<p>There are now strict restrictions on pooling structures. Regulatory arbitrage cannot be done by creating any structure. So, creating artificial structures to bypass the rules is now prohibited.&nbsp;<\/p>\n\n\n\n<p>New rules have also been introduced&nbsp;regarding&nbsp;Credit Default Swaps (CDS):&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Category I AIF:&nbsp;<\/strong>Can use CDS only for hedging&nbsp;<\/li>\n\n\n\n<li><strong>Category III AIF:&nbsp;<\/strong>Can do both hedging and trading (within limit)&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The use of an RFQ platform has been made mandatory to increase transparency in the corporate bond market. At least 10% of secondary market trades must be done through the RFQ system.&nbsp;<\/p>\n\n\n\n<p>If there is a transaction where AIF is both buyer and seller, then that too must be done in RFQ in one-to-one mode.&nbsp;<\/p>\n\n\n\n<p>In addition, disclosure has been made mandatory&nbsp;regarding&nbsp;portfolio concentration. It must be clearly shown how much exposure there is in a company or asset. These rules increase transparency in the overall market and strengthen risk management.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Overseas Investment Rules &amp; Reporting Framework&nbsp;&nbsp;<\/h2>\n\n\n\n<p>The SEBI 2026 Master Circular has also brought&nbsp;very strict&nbsp;rules on overseas investment. The entire industry-level cap has been kept up to USD 1,500 million. This limit will be shared among all AIFs and VC funds.&nbsp;<\/p>\n\n\n\n<p>A maximum of 25% foreign investment can be made in a scheme-level investment. It cannot be exceeded. Investment can be made only in eligible countries. Those countries should be IOSCO&nbsp;MMoU&nbsp;Appendix A signatories or countries having a bilateral agreement with SEBI. Investment in FATF blacklisted or&nbsp;greylisted&nbsp;countries is completely prohibited.&nbsp;<\/p>\n\n\n\n<p>No overseas investment can be made without SEBI approval. After getting approval, the fund must deploy that money within 4 months. If not, then the limit can be given to other applicants.&nbsp;<\/p>\n\n\n\n<p><strong>The reporting system is now&nbsp;very strict<\/strong>:&nbsp;<\/p>\n\n\n\n<ul>\n<li>The&nbsp;utilization&nbsp;report must be&nbsp;submitted&nbsp;within 5 days&nbsp;<\/li>\n\n\n\n<li>Non-utilization&nbsp;or surrender must be reported within 2 days&nbsp;<\/li>\n\n\n\n<li>Divestment details must be emailed to SEBI within 3 days&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>All these rules have been aligned with FEMA 1999, RBI overseas investment guidelines, and the SEBI framework. Overall, overseas investment has now become much more controlled, transparent, and&nbsp;time-bound.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the Key Compliance Errors Under SEBI AIF Master Circular 2026?&nbsp;<\/h2>\n\n\n\n<p>According to SEBI AIF Master Circular 2026, the biggest challenge now is not just knowing the rules but following them properly. Many fund managers are still falling into compliance risk due to small mistakes. These mistakes can lead to penalties or regulatory action in the future.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(A) Documentation Errors&nbsp;<\/h3>\n\n\n\n<p>Sometimes, PPM is not completed properly. Some important disclosures are missing. Again, the&nbsp;distribution&nbsp;waterfall structure is shown incorrectly. It can create a big issue later.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(B) Reporting Failures&nbsp;<\/h3>\n\n\n\n<p>Late submission of overseas investment reports is now&nbsp;a very common&nbsp;problem. Apart from this, not filing on time on the SEBI intermediary portal is also considered a major violation.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(C) Certification Gaps&nbsp;<\/h3>\n\n\n\n<p>Many times, KIT members do not have valid NISM certifications.&nbsp;Again, the fit and proper declaration&nbsp;is&nbsp;not&nbsp;submitted&nbsp;properly. It creates an eligibility issue.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(D) Investor Onboarding Issues&nbsp;<\/h3>\n\n\n\n<p>Investor eligibility is not properly checked in many cases. FATF or IOSCO compliance verification is missed. It increases regulatory risk.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(E) Operational Breaches&nbsp;<\/h3>\n\n\n\n<p>In Category III AIF, crossing the leverage limit or reporting the breach late is now&nbsp;a very sensitive&nbsp;issue. Failure to report on time can result in penalties.&nbsp;Even a small mistake can now create a big compliance problem.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Impact of SEBI AIF Master Circular 2026&nbsp;<\/h2>\n\n\n\n<p>SEBI AIF Master Circular 2026 has brought about&nbsp;a big change&nbsp;in the entire AIF ecosystem. Its impact is seen differently on fund managers, investors, and the entire industry.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">For Fund Managers&nbsp;<\/h3>\n\n\n\n<p>The compliance workload for fund managers has now increased a lot. More reporting, documentation, and certification must be&nbsp;maintained&nbsp;than before. It has become difficult to run an AIF without a strong internal compliance system.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">For Investors&nbsp;<\/h3>\n\n\n\n<p>This is&nbsp;a very positive&nbsp;change for investors. Transparency has now increased a lot. Investment details are becoming clearer, and opportunities for&nbsp;misselling&nbsp;are reduced. Most importantly, assured returns are now completely banned, creating a risk-based investing culture.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">For the Industry&nbsp;<\/h3>\n\n\n\n<p>The entire AIF industry is&nbsp;becoming&nbsp;more standardized. All funds follow the same rules, which has increased market fairness. India&rsquo;s credibility has also improved in the eyes of international investors. The governance system is much stronger than before.&nbsp;<\/p>\n\n\n\n<p>So, the compliance burden has increased significantly, and costs are increasing. But this system will make the market stable and mature in the long term. The AIF ecosystem is now becoming more disciplined, transparent, and globally aligned.&nbsp;<\/p>\n\n\n\n<p>Overall, this can be called a structural upgrade for India&rsquo;s alternative investment market.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How does Enterslice help with AIF&nbsp;Compliance?&nbsp;<\/h2>\n\n\n\n<p>Enterslice is a professional advisory firm that provides full support for AIF registration and ongoing SEBI compliance.&nbsp;The AIF industry has become very complex, so maintaining compliance without proper guidance is difficult.&nbsp;<\/p>\n\n\n\n<p><strong>Our services:<\/strong>&nbsp;<\/p>\n\n\n\n<ul>\n<li>Assist&nbsp;in the AIF registration process as per the SEBI framework&nbsp;<\/li>\n\n\n\n<li>Support PPM drafting and filing through Merchant Banker coordination&nbsp;<\/li>\n\n\n\n<li>Assist&nbsp;in NISM certification readiness for the Key Investment Team (KIT)&nbsp;<\/li>\n\n\n\n<li>Provide filing and reporting guidance on SEBI Intermediary Portal&nbsp;<\/li>\n\n\n\n<li>Perform regular&nbsp;<strong><a href=\"https:\/\/enterslice.com\/aif-audit-in-india\">AIF&nbsp;audits<\/a><\/strong>&nbsp;and gap analysis&nbsp;<\/li>\n\n\n\n<li>Support in the overseas investment approval and reporting process&nbsp;<\/li>\n\n\n\n<li>Help in designing the CIV structure and the co-investment framework&nbsp;<\/li>\n\n\n\n<li>Provide end-to-end regulatory compliance advisory for fund managers&nbsp;<\/li>\n\n\n\n<li>Assist&nbsp;in preparing the&nbsp;<strong><a href=\"https:\/\/enterslice.com\/compliance-test-report-for-aif\">compliance test report for AIF<\/a><\/strong>&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Our advisory support&nbsp;reduces compliance risk and avoids regulatory penalties. Small mistakes can lead to big problems for many fund managers. This&nbsp;makes structured advisory support important. Enterslice simplifies the entire journey from AIF setup to ongoing compliance.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">To Wrap Up&nbsp;&nbsp;<\/h2>\n\n\n\n<p>The SEBI Master Circular for AIFs 2026 has brought&nbsp;a big change&nbsp;in the alternative investment industry in India. All the old circulars have been combined into a single unified compliance system. The rules have become clearer and more structured.&nbsp;<\/p>\n\n\n\n<p>The AIF industry is now moving away from a fragmented system and towards structured governance. Fund managers, sponsors, and investors-&nbsp;everyone will now have to be more disciplined. Timely reporting, proper disclosure, and transparency are now mandatory.&nbsp;<\/p>\n\n\n\n<p>While this change will create some pressure, it will make the market stronger and more globally competitive in the long term. The AIF sector is now&nbsp;becoming more institutional.&nbsp;&nbsp;<\/p>\n\n\n\n<p>A strong compliance culture is&nbsp;very important&nbsp;here, because&nbsp;it increases investor trust.&nbsp;<strong><a href=\"https:\/\/enterslice.com\/\">Enterslice<\/a><\/strong>&nbsp;can play a significant role in simplifying this entire compliance journey. So, contact us today for hassle-free compliance.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">FAQs Related To&nbsp;SEBI AIF Master Circular<\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3>What is the SEBI Master Circular for AIFs 2026?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">SEBI Master Circular for AIFs 2026 is a single&nbsp;consolidated&nbsp;document where all the old circulars related to AIF have been brought together. It was issued by SEBI on 3 June 2026. It simplifies compliance and provides all the rules in one place. Earlier, there were many separate rules; now everything is available together. This helps fund managers understand&nbsp;the compliance framework clearly.<\/p><\/li><li style=\"list-style-type: none\"><h3>Who does the new AIF circular apply to?<\/h3><p class=\"saswp-faq-answer-text\">This new AIF circular&nbsp;is applicable&nbsp;to all types of AIFs. Such as Category I, Category II, and Category III AIFs. Fund managers, sponsors, trustees, custodians, and other intermediaries also fall under it. Everyone in the entire ecosystem will have to follow these rules. It is a mandatory compliance framework for those who run or manage AIFs.<\/p><\/li><li style=\"list-style-type: none\"><h3><strong>What are<\/strong> <strong>the biggest changes in AIF regulations in 2026?<\/strong>&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">The major changes in 2026 include fundraising rules, PPM structure, reporting systems, and co-investment frameworks. Assured return is now completely banned. PPM has now been divided into two parts, and disclosure has increased a lot. The reporting timeline for overseas investment has been made&nbsp;very strict. In addition, the CIV co-investment structure has been newly introduced, which increases transparency.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>Is an assured return allowed under the new rules?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">As per the SEBI AIF 2026 rules, an assured return is completely prohibited.&nbsp;No fund manager, sponsor, or trustee can give a return guarantee in advance. This has been brought for investor protection. Earlier, misleading promises were&nbsp;often made,&nbsp;the new rules&nbsp;aims&nbsp;to stop this. All investments now depend on market risk. This has made the system more transparent.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3><strong>What is the <\/strong>new <strong>PPM structure in AIFs?<\/strong>&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">The new PPM structure is now divided into two parts. Part A&nbsp;contains&nbsp;all the mandatory information, which has been fixed by SEBI. In Part B,&nbsp;additional&nbsp;or optional details can be given. So, the basic structure of all funds has become the same. Waterfall examples, disciplinary history, and investor charter are now mandatory in PPM. This has increased investor clarity a lot.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3><strong>What are the <\/strong>KIT <strong>certification requirements?<\/strong>&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">KIT, or Key Investment Team, certification is now mandatory. The investment team of the fund will have to take NISM certification. NISM Series-XIX-C or XIX-D is&nbsp;required&nbsp;for Category I and II. XIX-C or XIX-E is&nbsp;required&nbsp;for Category III. This ensures that the people taking investment decisions&nbsp;are trained and qualified. Schemes cannot be launched without certification.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3><strong>How are <\/strong>overseas <strong>investments regulated now?<\/strong>&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Overseas investment is now much more controlled. The entire industry cap is USD 1,500 million. Each scheme can invest up to a maximum of 25%. Investment can only be made in IOSCO or SEBI-approved countries.&nbsp;FATF blacklisted countries are completely prohibited.&nbsp;Investment cannot be made without SEBI approval.&nbsp;Reporting is very strict: 5, 2, and 3-day timelines have to be followed.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>What is the CIV co-investment framework?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">A CIV or co-investment vehicle is a new structure. It is used for co-investment within the AIF. It has separate bank accounts and demat accounts. All assets are kept separate, so there is no risk of mixing. Leverage cannot be used. It provides extra protection to investors and makes the co-investment process more transparent.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3><strong>What are <\/strong>common <strong>compliance mistakes in AIFs?<\/strong>&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Some common mistakes are made in AIFs, such as incomplete disclosure in PPM, wrong writing of waterfall structure, reporting delay, and missing certification. Sometimes, KIT members do not have NISM certification. The FATF check is missed in investor onboarding. Apart from this, crossing the leverage limit is also a common issue in Category III AIF. These mistakes can lead to regulatory problems.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>How does SEBI improve investor protection?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">SEBI has made investor protection much stronger. Now, assured returns are banned, so fake promises are stopped. All information in the PPM&nbsp;has to&nbsp;be given clearly. The investor charter has been made mandatory. The reporting system has become more transparent. Overseas investment and portfolio exposure are now closely&nbsp;monitored. This has increased investor confidence a lot.<\/p><\/li><li style=\"list-style-type: none\"><h3>What happens if AIFs&nbsp;fail to&nbsp;comply?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">If an AIF does not follow compliance, then SEBI can give a penalty, warning, or registration suspension. A reporting delay or missing certification can lead to regulatory action.&nbsp;Breach of leverage limits or failure of disclosure&nbsp;is considered a very serious violation.&nbsp;In many cases, fund launches or operations can also be stopped. So, it is important to follow compliance very strictly.&nbsp;<\/p><\/li><li style=\"list-style-type: none\"><h3>How can Enterslice help AIF managers?&nbsp;<\/h3><p class=\"saswp-faq-answer-text\">Enterslice provides complete support to AIF managers. We help with AIF registration, PPM drafting, and SEBI portal filing. We also support NISM certification readiness and KIT compliance. Our team provides guidance on overseas investment approval, reporting, and CIV structure design. Our focus is to reduce compliance risk and ensure a smooth approval process.&nbsp;<\/p><\/li><\/ol><\/div>","protected":false},"excerpt":{"rendered":"<p>The Indian capital <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\" href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\" data-gt-translate-attributes=\"[{&quot;attribute&quot;:&quot;data-cmtooltip&quot;, &quot;format&quot;:&quot;html&quot;}]\">market<\/a> has changed significantly over the last ten years. Earlier, most investments were limited to banks, FDs, or the stock market. But now big investors are investing money in new ways. Among those new ways, Alternative Investment Funds (AIFs) have become&nbsp;very popular.&nbsp; AIFs raise capital from large investors and invest in startups, [&hellip;]<\/p>\n","protected":false},"author":56,"featured_media":90680,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2828,11309],"tags":[],"acf":{"service_id":"996"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>sebi-aif-master-circular-new-compliance-rules-and-changes<\/title>\n<meta name=\"description\" content=\"The SEBI Master Circular for AIFs 2026 is a consolidated regulatory document. The earlier separate circulars related to AIFs have been consolidated together and made into a new unified guide.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/sebi-aif-master-circular-new-compliance-rules-and-changes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"sebi-aif-master-circular-new-compliance-rules-and-changes\" \/>\n<meta property=\"og:description\" content=\"The SEBI Master Circular for AIFs 2026 is a consolidated regulatory document. The earlier separate circulars related to AIFs have been consolidated together and made into a new unified guide.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/sebi-aif-master-circular-new-compliance-rules-and-changes\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-10T12:43:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-06-10T12:43:37+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/06\/SEBI-AIF-Master-Circular-New-Compliance-Rules-and-Changes.webp\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Margesh Rai","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2024\/03\/margesh.kumar_.rai_.png","authorDescription":"Margesh Kumar Rai is a passionate and versatile content writer with 6+ years of combined experience as a content writer and content moderator in BFSI, Fintech, Growth Advisory, Business Valuation, Debt Recovery, etc. His interest in the field of startup consulting and compliance support pulled him into the space of legal fintech research.","postViews":3,"readingTime":10,"nextPost":null,"prevPost":{"id":90674,"slug":"oman-mainland-company-vs-free-zone-company"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2026\/06\/SEBI-AIF-Master-Circular-New-Compliance-Rules-and-Changes.webp","postTerms":"SEBI","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90679"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=90679"}],"version-history":[{"count":2,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90679\/revisions"}],"predecessor-version":[{"id":90682,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/90679\/revisions\/90682"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/90680"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=90679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=90679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=90679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}