SEBI/HO/AFD/AFD - POD - 1/P/CIR/2024/135 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/AFD/AFD - POD - 1/P/CIR/2024/135 October 08, 2024 To, All Alternative Investment Funds (AIFs) All Custodians Sir/Madam, Sub: Specific due diligence of investors and investments of AIFs In terms of Regulation 20(20) of SEBI (Alternative Investment Funds) Regulations, 2012 ('AIF Regulations'), inserted vide notification dated April 25, 2024, every AIF , Manager of the AIF and Key Management Personnel of the Manager and the AIF shall exercise specific due diligence, with respect to investors and investments of the AIF , to prevent facilitation of circumvention of such laws, as may be specified by SEBI from time to time. In this regard, the specific due diligence to be carried out by AIFs, managers of AIFs and their Key Management Personnel, with respect to investors and investments of the AIF, to prevent facilitation of circumvention of the following regulatory frameworks , are being specified in this circular - Provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('ICDR Regulations'), and other regulations of SEBI wherein benefits or relaxations have been provided to entities designated as Qualified Institutional Buyers (QIBs). Provisions of the 'Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002' (SARFAESI Act) wherein benefits are provided to entities designated as Qualified Buyers (QBs). Prudential norms specified by Reserve Bank of India (RBI) for regulated lenders with respect to Income Recognition, Asset Classification, Provisioning and restructuring of stressed assets . Rule 6 of Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules) for investment from countries sharing land border with India (read with Press Note 3 dated April 17, 2020 of FDI Poli