The Securities and Exchange Board of India (SEBI) has granted Alternative Investment Funds (AIFs) additional time to comply with reporting requirements related to differential rights issued to select investors.The deadline, originally set for February 28, 2025, has now been extended to March 31 following industry representations seeking more time for compliance.
The requirement stems from amendments to the SEBI (Alternative Investment Funds) Regulations, 2012, notified on November 18, 2024, ensuring that investors receive rights and proceeds distribution in proportion (pro-rata) to their commitments within a scheme, while maintaining pari-passu treatment.
A SEBI circular issued on December 13, 2024 outlined a framework for differential rights that AIFs may offer without affecting other investors.Under these rules, AIFs or their schemes that filed a Private Placement Memorandum (PPM) with SEBI on or after March 1, 2020 and have issued differential rights outside the implementation standards set by the Standard Setting Forum for AIFs were required to submit reports by February 28, 2025.
The requirement stems from amendments to the SEBI (Alternative Investment Funds) Regulations, 2012, notified on November 18, 2024, ensuring that investors receive rights and proceeds distribution in proportion (pro-rata) to their commitments within a scheme, while maintaining pari-passu treatment.
A SEBI circular issued on December 13, 2024 outlined a framework for differential rights that AIFs may offer without affecting other investors.Under these rules, AIFs or their schemes that filed a Private Placement Memorandum (PPM) with SEBI on or after March 1, 2020 and have issued differential rights outside the implementation standards set by the Standard Setting Forum for AIFs were required to submit reports by February 28, 2025.
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SEBI’s extension now gives fund houses until the end of March to meet this compliance requirement.
The regulator stated that the move aims to ease compliance burdens while ensuring adherence to investor protection norms. The circular is effective immediately and is available on SEBI’s website under legal circulars for Alternative Investment Funds.
