‘Green-Channel: AIF Rollout Upon Document Acknowledgement’ (GARUDA) Mechanism for Processing of Placement Memorandum of Alternative Investment Funds (AIFs) filed with SEBI
Summary
This circular introduces the GARUDA mechanism to expedite the launch of Alternative Investment Fund schemes by allowing immediate filing and circulation upon document acknowledgement. It establishes distinct regulatory pathways for Regular schemes, which require Merchant Banker due diligence, versus AI only funds, LVFs, and Angel Funds, which are exempt from such requirements. The document updates the SEBI Master Circular for AIFs with new procedural modalities, disclaimer clauses, and naming conventions for these specific fund categories.
Text
With an objective to ease and expedite the process of launch of scheme/ funds by Alternative Investment Funds (“AIFs”), Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (‘AIF Regulations’), have been amended and notified on July 14, 2026 vide Gazette Notification No. CG-MH-E-14072026-274483.
AIFs can proceed with launch of their new scheme after 10 working days of filing of application with SEBI, unless otherwise advised. However, AIFs can proceed with launch of their first schemes from the date of grant of SEBI registration (or) after 10 working days of filing of application with SEBI, whichever is later.
PPM of Regular schemes shall be filed, at the time of registration or prior to launch of new scheme, on SEBI Intermediary portal along with the following documents in addition to payment of applicable (scheme) fee: (i) Duly signed Merchant Banker Due Diligence Certificate... (ii) Duly signed Fit and Proper declarations... (iii) Sponsor / Manager declarations... (iv) Copies of PANs...
The Merchant Banker shall independently exercise due diligence of all the disclosures in the PPM, satisfy itself with respect to veracity and adequacy of the disclosures and provide the due diligence certificate. The Merchant Banker appointed for filing of PPM shall not be an associate of the AIF, its sponsor, manager or trustee.
The following disclaimer clause shall be included in the PPMs of all Regular schemes: “1. Merchant Banker viz., <Name of Merchant Banker> has independently exercised due-diligence... 3. It is to be distinctly understood that submission of the PPM to SEBI should not in any way be deemed or construed that the same has been approved by SEBI.”
The Merchant Banker and the Manager of the AIF shall be responsible for ensuring the accuracy and completeness of all disclosures made in the PPMs of Regular schemes, as well as in declarations submitted by them. In case of any irregularity or lapse in the PPM, concerned entities shall be liable for action.
In terms of proviso to Regulation 12(3A) of AIF Regulations, AI only funds and LVFs are exempt from filing their PPM with SEBI through Merchant Banker and incorporating comments of SEBI in their PPM i.e. AI only funds and LVFs can launch their scheme immediately upon filing of PPM with SEBI.
Pursuant to amendment of AIF Regulations vide SEBI (AIF) (Second Amendment) Regulations, 2026, Angel Funds are exempt from filing their PPM with SEBI through Merchant Banker and incorporating comments of SEBI in their PPM.
Accordingly, Angel Funds can proceed with circulation of the PPM to their investors for soliciting funds from the date of grant of SEBI registration.
In addition to payment of applicable (scheme/ registration) fee, PPM of AI only funds or LVFs or Angel Funds shall be filed on SEBI intermediary portal along with a duly signed and stamped undertaking by Chief Executive Officer of the Manager of the AIF... and Compliance Officer of Manager of the AIF...
The following disclaimer clause shall be included in the PPMs of all AI only funds, LVFs and Angel Funds: “1. The Manager of the AIF viz., <Name of the Manager of the AIF> has independently exercised due-diligence... 3. It is to be distinctly understood that submission of the PPM to SEBI should not in any way be deemed or construed that the same has been approved by SEBI.”
The Manager of the AIF shall be responsible for ensuring the accuracy and completeness of all disclosures made in the PPMs and declarations submitted by them. In case of any irregularity or lapse in the PPM, concerned entities shall be liable for action.
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Source: SecMarx — ‘Green-Channel: AIF Rollout Upon Document Acknowledgement’ (GARUDA) Mechanism for Processing of Placement Memorandum of Alternative Investment Funds (AIFs) filed with SEBI. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.