SEBI suggests direct reporting of developments in alternative investment funds

Market regulator, SEBI has suggested that instead of going via the merchant banker, any modifications to the alternative investment funds’ (AIFs’) private placement memorandums (PPMs) should be submitted directly to the regulator.

Investors can learn the essential facts regarding an AIF from PPMs, the regulator added.

On an April 5 draft circular, the Securities and Exchange Board of India (Sebi) recommended a modification to make it easier for AIFs to transact with businesses.

The circular added, “To facilitate ease of doing business and rationalise cost of compliance for AIFs, it is proposed that changes in certain terms of PPM may not be required to be submitted through a merchant banker and may be filed directly with SEBI.”

Large-value funds for accredited investors (LVFs) should likewise be released from the obligation to notify a merchant banker of any modifications, as notified by the circular.

Any changes to PPM were advised to be submitted by LVFs directly to SEBI, along with a duly signed and stamped undertaking from the AIF Manager’s Compliance Officer and CEO.