SEBI/HO/AFD/PoD - 1/P/CIR/2024/123 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/AFD/PoD - 1/P/CIR/2024/123 September 19 , 2024 To, All Alternative Investment Funds Dear Sir/Madam, Subject: Modification in framework for valuation of investment portfolio of AIFs SEBI (Alternative Investment Funds) Regulations, 2012 ('AIF Regulations') were amended and notified on June 15, 2023 and SEBI circular no. SEBI/HO/AFD/PoD/CIR/2023/97 dated June 21, 2023 [subsumed subsequently in Chapter 22 of Master Circular for AIFs dated May 07, 2024 ("Master Circular " )] was issued to provide guidance to AIFs towards a consistent and standardized approach for valuation of their investment portfolios. In terms of Clause 22.1.2 of the Master Circular, valuation of securities which are not covered in para 22.1.1 of the Master Circular, shall be carried out as per valuation guidelines (taking into account recommendations of AIPAC of SEBI), endorsed by any AIF industry association, which in terms of membership represents at least 33% of the number of SEBI registered AIFs. In this context, an eligible AIF industry association meeting the aforesaid criteria, endorsed the International Private Equity and Venture Capital Valuation (IPEV) Guidelines for valuation of investment portfolio of AIFs in terms of Clause 22.1.2 of the Master Circular . Subsequently, SEBI received representations from the AIF industry highlighting issues with regard to certain aspects of the valuation framework for AIFs. In this regard, based on the public comments on consultation paper on " review of certain aspects of the framework for valuation of investment portfolio of AIFs " , recommendations of AIPAC and internal deliberations, the following has been decided: 4.1.Clause 22.1.1 of the Master Circular stands modified as under: 22.1.1 Valuation of securities, other than unlisted securi