Sebi issues operational framework to accelerate launch of AIF schemes

Markets regulator Sebi on Thursday released an operational framework for a green channel mechanism, GARUDA, to simplify and speed up the launch of schemes by Alternative Investment Funds (AIFs).

The operational framework for the ‘Green-Channel: AIF Rollout Upon Document Acknowl-edgement’ (GARUDA) mechanism followed amendments to the Sebi (Alternative Investment Funds) Regulations, 2012, notified earlier this month. Under the revised framework, AIFs launching regular schemes can proceed with the launch 10 working days after filing the Placement Memorandum (PPM) with Sebi through a registered merchant banker, unless otherwise advised by the regulator, Sebi said in its circular.

For first-time schemes, launches can commence from the date of Sebi registration or after the 10-working-day period from filing the application, whichever is later.

The regulator has also prescribed a streamlined process for Accredited Investor-only (AI-only) funds, Large Value Funds (LVFs) and Angel Funds. Such funds have been exempted from fil-ing their PPM through a merchant banker and can launch their schemes immediately upon filing the PPM with Sebi.

First schemes of AI-only funds and LVFs can be launched from the date Sebi grants registration, while Angel Funds can circulate their PPMs to investors from the date of registration.

Sebi has mandated merchant bankers to independently conduct due diligence on all disclosures made in the PPMs of regular schemes and certify that the disclosures are true, fair and adequate.

Merchant bankers appointed for filing PPMs cannot be associates of the AIF, its sponsor, man-ager or trustee.