SEBI/HO/AFD/PoD -1/P/CIR/2025/17 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/AFD/PoD -1/P/CIR/2025/17 To, All Alternative Investment Funds All Depositories All Custodians Dear Sir/Madam, Subject: Relaxation in timelines for holding AIFs’ investments in dematerialised form SEBI (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations") have been amended and notified on January 05, 2024, with respect to AIFs holding their investments in dematerialised form. Subsequently, SEBI Circular dated January 12, 2024 [subsumed subsequently in Chapter 21 of Master Circular for AIFs dated May 07, 2024 ("Master Circular")] prescribed timelines for AIFs with respect to holding their investments in dematerialised form . In this regard, it has been decided to relax the aforesaid timelines, and accordingly relevant provisions of Para 21 of the Master Circular stand modified as under: 21.1. Any investment made by an AIF on or after July 01, 2025 shall be held in dematerialised form only, irrespective of whether the investment is made directly in the investee company or is acquired from another entity. 21.2. The investments made by an AIF prior to July 01, 2025 are exempted from the requirement of being held in dematerialised form, except in the following cases: 21.2.1. Investee company of the AIF has been mandated under applicable law to facilitate dematerialisation of its securities; 21.2.2. The AIF, on its own, or along with other SEBI registered intermediaries/entities which are mandated to hold their investments in dematerialised form, exercises control over the investee company. February 14, 2025 For the purpose of the aforesaid clause, the definition of 'control' shall be construed with reference to Regulation 2(1)(f) of AIF Regulations. 21.3. The investments made by an AIF prior to July 01, 2025 which are covered under conditions a