The Securities and Exchange Board of India (Sebi) has rolled out a fast-track mechanism for processing private placement memoranda (PPMs) of alternative investment funds (AIFs) in an attempt to enable efficient capital deployment. As a result, AIFs can now launch non-large value fund (LVF) schemes and circulate the PPM to their investors after 30 days of filing the application with the regulator, as per a circular released on Thursday.
For first-time schemes, AIFs can launch schemes from the date of grant of Sebi registration or completion of 30 days of filing application with the regulator, whichever is later. Prior to the launch of the scheme, merchant bankers or AIFs will have to comply with any comments provided by Sebi during the 30-day period.
These will ease the earlier process where Sebi would review PPM disclosures and issue comments before granting permission for schemes to proceed. The regulator also made it mandatory for first close of a scheme to be declared within 12 months from the AIF becoming eligible to launch.
The framework will also be applicable to pending PPM non-LVF applications. Merchant bankers and AIF managers will be responsible for the completeness and accuracy of disclosures and any irregularity or lapses in the PPM will lead of actions from Sebi, as per the circular.
“This important step in ease of doing business will accelerate capital formation and at the same time casts greater responsibility on the Managers which the industry welcomes,” said Srini Sriniwasan, managing director of Kotak Alternate Asset Managers and chairperson of Indian Venture and Alternate Capital Association.