SEBI/HO/AFD/AFD - POD - 1/P/CIR/2024/175 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/AFD/AFD - POD - 1/P/CIR/2024/175 December 13 , 2024 To, All Alternative Investment Funds (AIFs) Sir/Madam, Sub: Pro -rata and pari-passu rights of investors of AIFs Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations " ) have been amended and notified on November 18, 2024 , with respect to maintaining pro-rata and pari-passu rights of investors in a scheme of an AIF. Copy of the aforesaid notification is available at link . A. Pro -rata rights of investors of AIFs - Regulation 20(21) of AIF Regulations states as under – "The investors of a scheme of an Alternative Investment Fund shall have rights, pro-rata to their commitment to the scheme, in each investment of the scheme and in the distribution of proceeds of such investment, except as may be specified by the Board from time to time: Provided that the rights of the investors of a scheme of Alternative Investment Fund issued prior to the notification of the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024, which are not pro-rata to their commitment to the scheme and not exempted by the Board, shall be dealt with in the manner specified by the Board." In this regard, it is specified that the requirement of maintaining investors' rights pro -rata to their commitment to the scheme, shall not be applicable in an investment of a scheme and distribution of proceeds of the investment to the extent – 3.1. an investor has been excused or excluded from participating in the said investment; or , 3.2. an investor has defaulted on providing his/her pro-rata contribution for the said investment. Further , the requirement of maintaining pro-rata rights of investors in distribution of proceeds of investments