Guidelines for AIFs for declaration of first close, calculation of tenure and change of sponsor/manager or change in control of sponsor/manager

SEBI/HO/AFD-1/PoD/P/CIR/2022/155 · 2022-11-17 · SEBI

Summary

This circular amends the SEBI (Alternative Investment Funds) Regulations, 2012 to specify guidelines for declaring first close, calculating tenure, and handling changes in sponsor or manager. It mandates that the first close be declared within 12 months of PPM registration or this circular's date, depending on the scheme type. Additionally, it introduces a fee structure for changes in control or management and clarifies tenure calculation methods for close-ended schemes.

Text

The First Close of a scheme shall be declared not later than 12 months from the date of SEBI communication for taking the PPM of the scheme on record.

In case of open ended schemes of Category III AIFs, the First Close shall refer to the close of their Initial Offer Period.

Corpus of the scheme at the time of declaring its First Close shall not be less than the minimum corpus prescribed in AIF Regulations for the respective category/sub-category of the AIF.

The commitment provided by sponsor or manager at the time of declaration of First Close, to the extent to meet the aforesaid minimum corpus requirement, shall not be reduced or withdrawn or transferred, post First Close.

Existing schemes of AIFs, who have not declared their First Close, shall declare their First Close not later than 12 months from the date of this circular.

Existing schemes of AIFs, whose PPMs were taken on record prior to 12 months from the date of this circular and have not declared their First Close, shall submit updated PPM with SEBI... through a SEBI registered merchant banker... and such updated PPM shall be circulated to investors before declaration of First Close.

The First Close of Large Value Fund for Accredited Investors (“LVF”) scheme shall be declared not later than 12 months from the date of grant of registration of the AIF or date of filing of PPM of scheme with SEBI, whichever is later.

Existing LVF schemes shall declare their First Close not later than 12 months from the date of this circular.

In case the First Close of a scheme is not declared within the timeline prescribed above, the AIF shall file a fresh application for launch of the said scheme as per applicable provisions of AIF Regulations by paying requisite fee to SEBI.

The tenure of close ended schemes of AIFs shall be calculated from the date of declaration of the First Close.

AIF may modify the tenure of a scheme at any time before declaration of its First Close. Prior to declaration of the First Close, the investor may withdraw or reduce commitment provided to such scheme of an AIF.

Existing schemes of AIFs which have declared their First Close, may continue to calculate their tenure from the date of Final Close in terms of SEBI Circular CIR/IMD/DF/7/2015 dated October 1, 2015.

Source: SecMarx — Guidelines for AIFs for declaration of first close, calculation of tenure and change of sponsor/manager or change in control of sponsor/manager. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.