Modalities for filing of placement memorandum through a Merchant Banker
Summary
This circular mandates that Alternative Investment Funds must file placement memorandums through SEBI-registered Merchant Bankers. It requires Merchant Bankers to conduct independent due diligence and submit a certificate verifying the veracity and adequacy of disclosures. The provisions apply to filings for new schemes, registration, and annual changes to the placement memorandum. This section details the due diligence checklist for Alternative Investment Fund placement memorandums, covering items 10 through 31. It includes specific requirements for temporary fund deployment, key personnel verification, investment committee structures, and conflict management policies. The document concludes with Annexure B, providing a standardized format for the due diligence certificate submitted to SEBI when changes are made to the placement memorandum.
Text
AIFs shall launch scheme(s) subject to filing of placement memorandum with SEBI through a SEBI registered Merchant Banker.
The Merchant Banker shall independently exercise due diligence of all the disclosures in the placement memorandum, satisfy itself with respect to veracity and adequacy of the disclosures and provide a due diligence certificate.
While filing draft placement memorandum at the time of registration or prior to launch of new scheme on the SEBI intermediary portal, the due diligence certificate provided by the Merchant Banker shall also be submitted, along with other necessary documents.
The details of the Merchant Banker shall be disclosed in the placement memorandum.
AIFs are required to intimate SEBI regarding any changes in terms of placement memorandum on a consolidated basis, within one month of the end of each financial year. Such intimation shall also be submitted through a Merchant Banker, along with the due diligence certificate provided by the Merchant Banker.
The Merchant Banker appointed for filing of placement memorandum shall not be an associate of the AIF, its sponsor, manager or trustee.
The provisions of this circular shall come into effect from the ninety first day from the date of notification of aforesaid amendment to AIF Regulations, i.e., November 11, 2021.
Whether type of instruments proposed for temporary deployment of funds is in line with applicable provision of AIF Regulations. In case of Category III AIFs, whether the scheme proposes to invest in such instruments also to provide applicable margin to recognized stock exchanges.
Whether maximum duration for such temporary deployment of funds is disclosed.
Whether the scheme intends to invest in units of AIFs. If yes, confirm whether necessary disclosures have been made in line with SEBI circular dated June 25, 2021.
Whether names of key management personnel are disclosed in the placement memorandum in line with SEBI circular dated June 25, 2021.
Whether it is verified that all members of key investment team are employees or partners or directors (as applicable) of the manager.
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Source: SecMarx — Modalities for filing of placement memorandum through a Merchant Banker. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.