SEBI/HO/AFD -1/AFD -1 -PoD/P/CIR/2024/39

10 · The circular is available on SEBI website at www.sebi.gov.in under the categories "Legal framework – Master Circulars" and "Info for - Alternative Investment Funds".

1 · 1. All applicants desirous of seeking registration as an Alternative Investment Fund ('AIF') are required to submit their applications only online, through the SEBI Intermediary Portal at https://siportal.sebi.gov.in. Further, all SEBI registered AIFs are required to file their compliance reports and submit applications for any request under the provisions of AIF Regulations and circulars issued thereunder, only through the SEBI Intermediary Portal .

1 · 2. In case of any queries and clarifications, users may refer to the manual provided in the SEBI Intermediary Portal or contact the Portal Helpline as specified in the manual.

1 · SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2017/87 dated July 31, 2017

2 · 1. Template(s) for PPM 2 and disclosures in PPM3

2 · 1.1. Private Placement Memorandum ('PPM') is a primary document in which all the necessary information about the AIF is disclosed to prospective investors. To ensure that a minimum standard of disclosure is made available in the PPM, a template has been mandated for the PPM , providing certain minimum level of information in a simple and comparable format. AIFs are also permitted to provide additional information in their PPM.

2 · 1.2. Thus, the template for PPM shall have two parts viz .

2 · 1.3. The template for PPM of AIFs raising funds under Category I and Category II is provided at Annexure 1 . The template for PPM of AIFs raising funds under Category III is provided at Annexure 2 .

2 · 1.4. Every AIF shall, in its PPM provide a detailed tabular example of how the fees and charges shall be applicable to the investor including the distribution waterfall.

2 · 1.5. Regulation 11(2) of the AIF Regulations requires that an AIF shall include history of disciplinary actions in its PPM. In this regard, it is clarified that all AIFs shall include in their PPM, disciplinary history of:

2 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/24 dated February 05, 2020

3 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014 and SEBI Circular No.

2 · 1.6. With respect to disclosure of disciplinary history as per para 2.1.5 above, the same shall be applicable for the last 5 years and where monetary penalty is involved, in all cases where such penalty is greater than 5 lakh rupees . With respect to disputed tax liabilities, the same shall not apply to liabilities in personal capacity of an individual. Contingent liabilities shall be as disclosed in books of accounts of the entity.

2 · 2. Modalities for filing of PPM through a Merchant Banker4 r4

2 · 2.1. The Merchant Banker shall independently exercise due diligence of all the disclosures in the PPM, satisfy itself with respect to veracity and adequacy of the disclosures and provide a due diligence certificate. The format of due diligence certificate is given at Annexure 3 .

2 · 2.2. While filing draft PPM at the time of registration or prior to launch of new scheme on the SEBI intermediary portal, the due diligence certificate provided by the Merchant Banker shall also be submitted, along with other necessary documents.

2 · 2.3. The details of the Merchant Banker shall be disclosed in the PPM .

2 · 2.4. The Merchant Banker appointed for filing of PPM shall not be an associate of the AIF, its sponsor, manager or trustee.

4 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DF6/P/CIR/2021/645 dated October 21, 2021

2 · 3. Validity of PPM Timeline for declaration of First Close of schemes of AIFs5

2 · 3.1. The First Close of a scheme shall be declared not later than 12 months from the date of SEBI communication for taking the PPM of the scheme on record.

2 · 3.2. In case of open ended schemes of Category III AIFs, the First Close shall refer to the close of their Initial Offer Period.

2 · 3.3. Corpus of the scheme at the time of declaring its First Close shall not be less than the minimum corpus specified in AIF Regulations for the respective category/sub-category of the AIF.

2 · 3.4. The commitment provided by sponsor or manager at the time of declaration of First Close, to the extent to meet the aforesaid minimum corpus requirement, shall not be reduced or withdrawn or transferred, post First Close.

2 · 3.5. The First Close of Large Value Fund for Accredited Investors ("LVF") scheme shall be declared not later than 12 months from the date of grant of registration of the AIF or date of filing of PPM of scheme with SEBI, whichever is later.

2 · 3.6. In case the First Close of a scheme is not declared within the timeline specified above, the AIF shall file a fresh application for launch of the said scheme as per applicable provisions of AIF Regulations by paying requisite fee to SEBI.

2 · 4. Audit of terms of PPM6

2 · 4.1. In order to ensure compliance with the terms of PPM, it is mandatory for AIFs to carry out an annual audit of such compliance. The audit shall be carried out either by an internal or external auditor/legal professional. However, audit of sections of PPM relating to 'Risk Factors', 'Legal, Regulatory and Tax Considerations' and 'Track Record of First Time Managers' shall be optional.

5 · SEBI circular No. SEBI/HO/AFD -1/PoD/P/CIR/2022/155 dated November 17, 2022

6 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/24 dated February 05, 2020 and SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/99 dated June 12, 2020

2 · 4.2. Audit of compliance with terms of PPM , shall be conducted at the end of each Financial Year and the findings of audit along with corrective steps, if any, shall be communicated to the Trustee or Board of Directors or Designated Partners of the AIF, Board of directors or Designated Partners of the Manager and SEBI, within 6 months from the end of the Financial Year.

2 · 4.3. The requirement of audit of compliance with terms of PPM shall not apply to AIFs which have not raised any funds from their investors. However, such AIFs shall submit a Certificate from a Chartered Accountant to the effect that no funds have been raised, within 6 months from the end of the Financial Year.

2 · 4.4. The requirements as mentioned at para 2.1.1, 2.1.3 and 2.4.1 above shall not apply to the following:

2 · 5. Changes in PPM 7

2 · 5.1. At the time of submission of final placement memorandum to SEBI, any changes which have been made vis-à-vis the draft placement memorandum submitted to SEBI at the time of application shall be listed clearly in the covering letter. Further, the changes shall also be highlighted in the copy of the final placement memorandum.

2 · 5.2. Any changes in terms of PPM and in the documents of the fund/scheme shall be intimated to investors and SEBI on a consolidated basis, within 1 month of the end of each financial year. Such intimation shall specifically mention the changes carried-out in the PPM and the documents of the fund/scheme, along with the relevant pages of revised sections/clauses 8 .

2 · 5.3. Such intimation to SEBI for changes in terms of PPM shall be submitted through a Merchant Banker, along with the due diligence certificate provided

7 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014 , SEBI Circular No. CIR/IMD/DF/16/2014 dated July 18, 2014

8 · SEBI circular No. SEBI/HO/IMD/IMD -I/DOF6/CIR/2021/549 dated April 07, 2021

2 · 5.4. 'Material changes' may be construed as changes in the fundamental attributes of the fund/scheme. In case of material changes significantly influencing the decision of the investor to continue to be invested in the AIF, the process as mentioned hereunder shall be complied with. Such changes shall include, but not be limited to the following:

9 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DF6/P/CIR/2021/645 dated October 21, 2021

2 · 5.5. With respect to para 2.5 . 4 above, the process for exit under the clause shall not apply in cases where the AIF has approval of not less than 75% of unit holders by value of their investment in the AIF with respect to sub-clauses (a) and (b).

3 · 1. In -principle approval 10

3 · 2. Change in category of AIF 11

3 · 2.1. Only AIFs who have not made any investments under the category in which they were registered earlier shall be allowed to make application for change in category.

3 · 2.2. Any AIF proposing to change its category shall make an application to SEBI for the same along with an application fees of 1 lakh rupees. The application shall include the updated Form A (Refer First Schedule to the AIF Regulations), other updated supporting documents, if any and rationale for the proposed change. Registration fees shall not apply for such applications.

3 · 2.3. If the AIF has received commitments/ raised funds prior to application for change in category, the AIF shall be required to send letters/emails to all its investors providing them the option to withdraw their commitments/ funds raised without any penalties/charges. Any fees collected from investors seeking to withdraw commitments/ funds shall be returned to them. Partial withdrawal may be allowed subject to compliance with the minimum investment amount required under the AIF Regulations.

3 · 2.4. The AIF shall not make any investments other than in liquid funds/ banks deposits until approval for change in category is granted by SEBI.

3 · 2.5. On approval of the request from SEBI, the AIF shall send a copy of the revised PPM and other relevant information to all its investors.

10 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

11 · SEBI circular No. CIR/IMD/DF/12/2013 dated August 07, 2013

4 · 1. In terms of Regulation 10(a) of AIF Regulations, AIFs may raise funds from any investor whether Indian, foreign or non-resident Indians, by way of issue of units. At the time of on -boarding investors, the manager of an AIF shall ensure the following 13 :

4 · 1.1. Foreign investor of the AIF is a resident of the country whose securities market regulator is a signatory to the International Organization of Securities Commission's Multilateral Memorandum of Understanding (Appendix A Signatory) or a signatory to the bilateral Memorandum of Understanding with SEBI.

4 · 1.2. The investor, or its beneficial owner as determined in terms of sub-rule (3) of rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, is not the person(s) mentioned in the Sanctions List notified from time to time by the United Nations Security Council and is not a resident in the country identified in the public statement of Financial Action Task Force as –

12 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014 and SEBI Circular No. CIR/IMD/DF/16/2014 dated July 18, 2014

13 · SEBI circular No. SEBI/HO/AFD -1/PoD/P/CIR/2022/171 dated December 09, 2022 and SEBI circular no. SEBI/HO/AFD/PoD1/CIR/2024/2 dated January 11, 2024

4 · 2. In case an investor who has been on -boarded to scheme of an AIF, subsequently does not meet the conditions specified at para 4.1 above, the manager of the AIF shall not drawdown any further capital contribution from such investor for making investment, until the investor again meets the said conditions.

4 · 3. All AIFs shall ensure that all marketing documents of the fund/scheme, if any, are distributed only on a private basis to its proposed investors and are in accordance with the PPM of the fund/scheme14 .

4 · 4. The terms of contribution or subscription agreement (by any name as it may be called), shall be aligned with the terms of the PPM and shall not go beyond the terms of the PPM15 .

4 · 5. With respect to Regulation 10(c) of AIF Regulations, an AIF may accept the following as joint investors for the purpose of investment of not less than the minimum investment amount as specified in AIF Regulations for respective category/sub-category of AIF:

4 · 6. With respect to units of AIF issued to the employees of the manager of the AIF for profit- sharing, Regulation 10(c) of AIF Regulations shall not be applicable in cases where such units do not entail any contribution/investment from the employees.

4 · 7. In case of an open-ended scheme of AIF, the first single lump-sum investment amount received from the investor should not be less than the minimum investment amount. Further, in case of request for partial redemption of units by an investor in an open-ended scheme of AIF, the AIF shall ensure that after such redemption, the amount of investment retained by the investor in the fund does not fall below the specified minimum limit as provided under the AIF Regulations.

14 · SEBI Circular No. CIR/IMD/DF/10/2013 dated July 29, 2013

15 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/24 dated February 05, 2020

5 · 1. Calculation of investment concentration norm for Category III AIFs 16

5 · 1.1. All Category III AIFs shall disclose the basis for calculation of investment concentration norm in the PPM of their schemes.

5 · 1.2. The basis for calculating investment concentration norm shall not be changed during the term of the scheme.

5 · 1.3. Category III AIFs which choose to calculate investment concentration norm based on NAV, shall comply with the following 17 :

5 · 2. Prudential requirements with respect to leverage 18

5 · 2.1. For the purpose of arriving at leverage undertaken by an AIF, leverage shall be calculated as the ratio of the exposure to the NAV of the AIF.

16 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DOF6/P/CIR/2022/0000000037 dated March 28, 2022

17 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DOF6/P/CIR/2021/663 dated Nov 22, 2021

18 · SEBI Circular No. CIR/IMD/DF/10/2013 dated July 29, 2013

5 · 2.2. Leverage shall be calculated as under:

5 · 2.3. The leverage of a Category III AIF shall not exceed 2 times of the NAV of the fund. i.e. If an AIF's NAV is 100 crore rupees, its exposure (Longs + shorts) after offsetting positions as permitted shall not exceed 200 crore rupees .

5 · 2.4. Category III AIFs investing in units of other AIFs may undertake leverage not exceeding two times of the value of portfolio (NAV) after excluding the value of investment in units of other AIFs19 .

5 · 2.5. The total exposure of the fund for the purpose of computing leverage shall be the sum of the market value of all the securities/ contracts held by the fund. The total exposure at any point of time will be a sum of exposure through instruments in both the spot market and the derivative market.

5 · 2.6. Exposure shall be calculated as below:

5 · 2.7. Idle cash and cash equivalents shall not be included in the calculation of total exposure. Long put positions shall be considered as short exposure and short put positions shall be considered as long exposure. Short selling of a stock through Securities Lending and Borrowing Mechanism ('SLBM') shall be treated as short exposure. Temporary borrowing arrangements which relate to and are fully covered by capital commitments from investors need not be included in calculation of leverage.

5 · 2.8. Offsetting of positions shall be allowed for calculation of leverage for transactions entered into for hedging and portfolio rebalancing as provided in para 12.25 of Master Circular No. SEBI/HO/IMD/IMD-PoD1/P/CIR/2023/74 for Mutual Funds dated May 19, 2023.

19 · SEBI Circular No. SEBI/HO/IMD -I/DF6/P/CIR/2021/584 dated June 25, 2021

5 · 2.9. Sum of all exposures without offsetting transactions for hedging and portfolio rebalancing shall be termed as 'gross exposure' and the ratio of such gross exposure and NAV shall be termed as 'gross leverage'.

5 · 2.10. NAV of the AIF shall be the sum of value of all securities adjusted for mark to market gains/losses (including cash and cash equivalents). The NAV shall exclude any funds borrowed by the AIF.

5 · 2.11. All the above restrictions/limits shall apply at the scheme-level.

5 · 2.12. All Category III AIFs shall have adequate systems in place to monitor their exposures. It shall be responsibility of the AIFs to ensure that the leverage shall not exceed the specified limit at all times.

5 · 2.13. All Category III AIFs shall report to the custodian the amount of leverage at the end of the day (based on closing prices), by the end of next working day 20 .

5 · 2.14. In case of a breach in limit:

20 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

5 · 3. Risk Management and Compliance 21

5 · 3.1. have a comprehensive risk management framework supported by an independent risk management function, appropriate to the size, complexity and risk profile of the fund.

5 · 3.2. have a strong and independent compliance function appropriate to the size, complexity and risk profile of the fund supported by sound and controlled operations and infrastructure, adequate resources and checks and balances in operations.

5 · 3.3. maintain appropriate records of the trades/transactions performed and such information should be available to SEBI, whenever sought.

5 · 3.4. provide full disclosure and transparency about conflicts of interest and how they manage them from time to time , to investors , in accordance with Regulation 21 of the AIF Regulations and any other guidelines as may be specified by SEBI from time to time. Such conflicts shall be disclosed to the investors in the placement memorandum and by separate correspondences as and when such conflicts may arise. Such information shall also be disclosed to SEBI as and when required by SEBI.

5 · 4. Redemption norms 22

5 · 4.1. These norms shall apply to open ended schemes of Category III AIFs.

5 · 4.2. The Manager of such AIFs shall ensure adequate and sufficient degree of liquidity of the scheme/ fund in order to allow it, in general, to meet redemption obligations and other liabilities.

5 · 4.3. The Manager shall establish, implement and maintain an appropriate liquidity management policy and process to ensure that the liquidity of the various underlying assets is consistent with the overall liquidity profile of the fund/scheme while making any investment .

21 · SEBI Circular No. CIR/IMD/DF/10/2013 dated July 29, 2013

22 · SEBI Circular No. CIR/IMD/DF/10/2013 dated July 29, 2013

5 · 4.4. The Manager of such AIFs shall clearly disclose the possibility of suspension of redemptions in exceptional circumstances to investors , in the PPM .

5 · 4.5. Suspension of redemptions by the Manager shall be justified only:

5 · 4.6. The Manager of such AIFs shall build the operational capability to suspend redemptions in an orderly and efficient manner. During the suspension of the redemptions, the Manager shall not accept new subscriptions.

5 · 4.7. The decision by the Manager to suspend redemptions, in particular the reasons for the suspension and the planned actions shall be appropriately documented and communicated to SEBI and to the investors.

5 · 4.8. The suspension shall be regularly reviewed by the Manager. The Manager shall take all necessary steps in order to resume normal operations as soon as possible having regard to the best interest of investors.

5 · 4.9. The Manager of such AIFs shall keep SEBI and investors informed about the actions undertaken by the manager throughout the period of suspension. The decision to resume normal operations shall also be communicated to SEBI and the investors as soon as possible.

5 · 5. Breach in corpus of open ended scheme 23

5 · 5.1. The AIF shall intimate to SEBI within 2 days of receiving request for redemption from the client.

5 · 5.2. The AIF shall take necessary action to bring back the scheme size to twenty crore rupees within 3 months from the date of such breach.

5 · 5.3. In case the AIF fails to bring back the corpus within the specified period, it shall redeem entire units of all investors and wind up the scheme in terms of Regulation 29 of AIF Regulations .

5 · 5.4. In case of repeated violations by the AIF, SEBI may take action against the AIF, as may be appropriate.

23 · SEBI circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

6 · 1. Each scheme of SSF shall have a corpus of at least one hundred crore rupees.

6 · 2. SSF shall accept an investment of value not less than ten crore rupees from an investor. In case of an accredited investor, the SSF shall accept an investment of value not less than five crore rupees. Further, in case of investors who are employees or directors of the SSF or employees or directors of the manager of the SSF, the minimum value of investment shall be twenty-five lakh rupees.

6 · 3. SSF intending to act as a resolution applicant under the Insolvency and Bankruptcy Code, 2016 shall ensure compliance with the eligibility requirement provided thereunder.

6 · 4. Further, in respect of SSF acquiring stressed loan in terms of Clause 58 of the Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 ('RBI Master Direction'), the following is specified:

6 · 4.1. SSF may acquire stressed loan in terms of clause 58 of RBI Master Direction upon inclusion of SSF in the respective Annex of the RBI Master Direction.

6 · 4.2. Stressed loan acquired by SSF in terms of clause 58 of the RBI Master Direction shall be subject to a minimum lock-in period of six months. The lock in period shall not be applicable in case of recovery of the stressed loan from the borrower.

6 · 4.3. SSF acquiring stressed loans in terms of the RBI Master Direction shall comply with the same initial and continuous due diligence requirements for its investors, as those mandated by RBI for investors in Asset Reconstruction Companies.

24 · SEBI Circular No. SEBI/HO/IMD -I/DF6/P/CIR/2022/009 dated Jan 27, 2022

7 · 1. Investment conditions

7 · 1.1. AIFs may invest in equity and equity linked instruments only of off-shore venture capital undertakings, subject to overall limit of USD 1500 million (combined limit for AIFs and Venture Capital Funds registered under the erstwhile Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996).

7 · 1.2. For the purpose of such investment, it is clarified that "Offshore Venture Capital Undertakings" means a foreign company whose shares are not listed on any of the recognized stock exchange in India or abroad.

7 · 1.3. Such investments shall not exceed 25% of the investable funds of the scheme of the AIF.

7 · 1.4. AIFs shall invest in an overseas investee company, which is incorporated in a country whose securities market regulator is a signatory to the International Organization of Securities Commission's Multilateral Memorandum of Understanding (Appendix A Signatories) or a signatory to the bilateral Memorandum of Understanding with SEBI.

7 · 1.5. AIFs shall not invest in an overseas investee company, which is incorporated in a country identified in the public statement of Financial Action Task Force (FATF) as:

25 · SEBI Circular No. SEBI/HO/AFD -1/PoD/CIR/P/2022/108 dated August 17, 2022, SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2018/103/2018 dated July 03, 2018 and SEBI Circular No. CIR/IMD/DF/7/2015 dated October 1, 2015

7 · 1.6. These investments would be subject to Foreign Exchange Management (Overseas Investment) Regulations, 2022, including amendments thereof and related directions issued by RBI from time to time.

7 · 1.7. AIFs shall not invest in Joint venture/Wholly Owned Subsidiary while making overseas investments.

7 · 1.8. AIFs shall adhere to FEMA, 1999, its Rules, Regulations and Directions issued by the Government/ RBI from time to time .

7 · 1.9. AIFs shall comply with all requirements under RBI guidelines on opening of branches/subsidiaries/Joint Venture /undertaking investment abroad by NBFCs, where more than 50% of the funds of the AIF has been contributed by a single NBFC.

7 · 1.10. AIFs shall transfer/sell the investment in overseas investee company only to the entities eligible to make overseas investments, as per the extant guidelines issued under the FEMA, 1999.

7 · 2. Allocation of overseas investment limit

7 · 2.1. AIFs shall file an application to SEBI for allocation of overseas investment limit in the format specified at Annexure 6. The Trustee/Board/Designated Partners of the AIFs shall submit an undertaking to SEBI as specified at Annexure 6 with respect to the proposed overseas investment.

7 · 2.2. The allocation of investment limits would be done on 'first come -first serve' basis, depending on the availability in the overall limit of USD 1500 million.

7 · 2.3. In case an AIF who is allocated certain investment limit, wishes to apply for allocation of further investment limit, the fresh application shall be dealt with on the basis of the date of its receipt and no preference shall be granted to it in fresh allocation of investment limit.

7 · 2.4. The AIF shall have a time limit of four26 months from the date of approval from SEBI for making allocated investments in offshore venture capital undertakings. In case the applicant does not utilize the limits allocated within the stipulated period, SEBI may allocate such unutilized limit to other applicants.

26 · SEBI circular no. SEBI/HO/AFD/PoD/CIR/P/2023/137 dated August 04, 2023

7 · 2.5. If an AIF liquidates investment made in an overseas investee company previously, the sale proceeds received from such liquidation, to the extent of investment made in the said overseas investee company, shall be available to all AIFs (including the selling AIF) for reinvestment.

7 · 3. Reporting of overseas investments

7 · 3.1. AIFs shall report the utilization of the overseas limits within 5 working days of such utilization on SEBI intermediary portal at https://siportal.sebi.gov.in .

7 · 3.2. AIFs shall also report the following through SEBI intermediary portal:

7 · 3.3. AIFs shall furnish the sale/divestment details of the overseas investments to SEBI in the format given at Annexure 7 within 3 working days of the divestment, by emailing to aifreporting@sebi.gov.in, for updating the overall limit available for overseas investment by AIFs.

27 · SEBI circular no. SEBI/HO/AFD/PoD/CIR/P/2023/137 dated August 04, 2023

8 · 1. In terms of Regulation 15(1) (c) and (d) of the AIF Regulations, AIFs may invest in an investee company up to a specified limit, directly or through investment in the units of other AIFs. AIFs may invest in units of other AIFs without labelling themselves as a Fund of AIFs.

8 · 2. Existing AIFs may also invest simultaneously in securities of investee companies and in units of other AIFs, subject to appropriate disclosures in the PPM and with the consent of at least two -thirds of unit holders by value of their investment in the AIF in terms of Regulation 9(2) of the AIF Regulations.

8 · 3. AIFs which propose to invest in units of other AIFs shall provide, inter-alia, the following information in their PPMs:

8 · 4. Pooling vehicles shall not be created solely for the purpose of investing in an AIF unless the pooling vehicles are registered with SEBI as AIFs 29 .

28 · SEBI Circular No. SEBI/HO/IMD -I/DF6/P/CIR/2021/584 dated June 25, 2021

29 · SEBI Circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

9 · 1. Conditions applicable to Category I, II and III AIFs for buying CDS

9 · 1.1. Category I AIFs and Category II AIFs may buy CDS on underlying investment in debt securities, only for the purpose of hedging.

9 · 1.2. Category III AIFs may buy CDS for the purpose of hedging or otherwise, within permissible leverage as specified in para 5.2 of this Master Circular .

9 · 2. Conditions applicable to Category II and III AIFs for selling CDS

9 · 2.1. Category III AIFs may sell CDS, subject to the condition that effective leverage undertaken is within the permissible limits as specified in para 5.2 of this Master Circular .

9 · 2.2. Further, Category II AIFs and Category III AIFs may sell CDS, by earmarking unencumbered Government bonds/Treasury bills equal to the amount of the said CDS exposure. Such earmarked securities may also be used for maintaining applicable margin requirements for the said CDS exposure. Exposure to CDS undertaken in the aforesaid manner shall not tantamount to leverage.

9 · 2.3. Total exposure to an investee company, including exposure through CDS, shall be within the limit of applicable concentration norm as specified in AIF Regulations.

9 · 3. Other conditions applicable for transacting in CDS

9 · 3.1. AIFs shall report details of CDS transaction to the custodian, by the next working day, in the manner as specified by the custodian.

9 · 3.2. Custodian shall put in place a mechanism to collect necessary details from AIFs transacting in CDS, to monitor the compliance with conditions specified at para 9.1 and para 9.2 above.

30 · SEBI Circular No. SEBI/HO/AFD/PoD/CIR/2023/15 dated January 12, 2023

9 · 3.3. The obligation of manager/AIF and custodian in case of breach of leverage limits due to transactions in CDS by Category III AIFs, shall be as specified in para 5.2.13 and para 5.2.14 of this Master Circular .

9 · 3.4. Further, for Category II AIFs and Category III AIFs which sell CDS by earmarking securities in the manner as mentioned at para 9.2.2 above, in case the amount of earmarked securities falls below CDS exposure:

9 · 3.5. Any unhedged position, which shall result in gross unhedged positions across all CDS transactions exceeding twenty-five percent of investable funds of the scheme of an AIF, shall be taken only after intimating to all unit holders of the scheme.

9 · 3.6. In terms of Regulations 16(1)(c) and 17(c) of AIF Regulations, Category I and II AIFs shall not borrow funds directly or indirectly and engage in leverage except for meeting temporary funding requirements for not more than thirty days, not more than four occasions in a year and not more than ten percent of the investable funds. In this regard, Category I and Category II AIFs which transact in CDS, shall maintain thirty days cooling off period between the two periods of borrowing or engaging in leverage.

9 · 3.7. All CDS transactions shall be on a platform regulated by SEBI or RBI, to enhance transparency and disclosure.

9 · 3.8. AIFs transacting in CDS, shall also ensure compliance with applicable provisions of RBI notification on 'Master Direction Reserve Bank of India (Credit Derivatives) Directions, 2022', dated February 10, 2022 and other directives issued by RBI in this regard from time to time .

10 · 1. AIFs shall undertake at least 10% of their total secondary market trades in Corporate Bonds by value in a month by placing/seeking quotes on the RFQ platform.

10 · 2. Further, in terms of Chapter XXII of Master Circular for issue and listing of Nonconvertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated July 07, 2023 quotes on RFQ platform can be placed to an identified counterparty (i.e. 'one-to-one' mode) or to all the participants (i.e. 'one-to-many' mode). In this regard, it is clarified that all transactions in Corporate Bonds wherein AIF(s) is on both sides of the trade shall be executed through RFQ platform in 'one-to-one' mode. However, any transaction entered by an AIF in Corporate Bonds in 'one-tomany' mode which gets executed with another AIF, shall be counted in 'one-tomany' mode and not in 'one-to-one' mode.

31 · SEBI Circular No. SEBI/HO/AFD/PoD/P/CIR/2023/017 dated February 01, 2023

11 · 1. Clarifications related to investments32:

11 · 1.1. With respect to investment by the sponsor/manager in the AIF, the sharing of loss by the sponsor/manager shall not be less than pro rata to their holding in the AIF vis-à-vis other unit holders.

11 · 1.2. For the purpose of maintaining continuing interest under Regulation 10(d) of the AIF Regulations, such interest shall be maintained pro-rata to the amount of funds raised (net) from other investors in the AIF.

11 · 1.3. For the purpose of Regulation 15(1)(c) of AIF Regulations, in case the AIF proposes to invest into real estate or infrastructure projects, every such investee company shall hold or propose to hold not less than one project, directly or indirectly.

11 · 1.4. For the purpose of Regulation 15(1)(e) of AIF Regulations, prior to every investment in an associate or in units of an AIF managed or sponsored by Manager, Sponsor or associates of Manager or Sponsor, approval of the investors as specified shall be obtained.

11 · 1.5. With respect to Regulation 17(a) of the AIF Regulations, it is clarified that the term 'primarily' is indicative of where the main thrust of Category II AIFs ought to be. The investment portfolio of a Category II AIF ought to be more in unlisted securities as against the aggregate of other investments.

11 · 2. Schemes of AIFs which have adopted priority in distribution among investors33:

11 · 2.1. As per AIF Regulations, "Alternative Investment Fund" is a privately pooled investment vehicle, which collects funds from investors, for investing it in accordance with a defined investment policy for the benefit of its investors.

11 · 2.2. As per para 11.1.1 of this Master Circular, with respect to investment by the sponsor/manager in the AIF, the sharing of loss by the sponsor/manager shall not be less than pro rata to their holding in the AIF vis-à-vis other unit holders. While it has not been explicitly restricted in AIF Regulations that the sharing of loss by a class of investors shall not be less than pro rata to their holding in the AIF vis-à-vis other classes of investors/unit holders, it was

32 · SEBI Circular No. CIR/IMD/DF/14/2014 dated June 19, 2014 and SEBI Circular No. CIR/IMD/DF/16/2014 dated July 18, 2014

33 · SEBI Circular No. SEBI/HO/AFD -1/PoD/P/CIR/2022/157 dated November 23, 2022

11 · 2.3. The aforesaid matter is being examined by SEBI in consultation with Alternative Investment Policy Advisory Committee, AIF industry associations and other stakeholders. Meanwhile, it is decided that schemes of AIFs which have adopted aforesaid priority distribution model, shall not accept any fresh commitment or make investment in a new investee company, till a view is taken by SEBI in this regard.

11 · 2.4. This provision under para 11.2.3 came into force from November 23, 2022.

11 · 3. Calculation of tenure of close -ended schemes of AIFs34:

11 · 3.1. The tenure of close ended schemes of AIFs shall be calculated from the date of declaration of the First Close.

11 · 3.2. AIF may modify the tenure of a scheme at any time before declaration of its First Close. Prior to declaration of the First Close, the investor may withdraw or reduce commitment provided to such scheme of an AIF.

11 · 3.3. Schemes of AIFs which have declared their First Close as on November 17, 2022, may continue to calculate their tenure from the date of Final Close. Such existing schemes of AIFs, which are yet to declare Final Close, shall declare their Final Close as per the timeline provided in the PPM of the scheme and the AIF/manager shall not have any discretion to extend the said timeline provided in the PPM.

34 · SEBI Circular No. SEBI/HO/AFD -1/PoD/P/CIR/2022/155 dated November 17, 2022

12 · 1. Pursuant to public consultation and approval of the SEBI Board, the framework for "Accredited Investors" (AIs) has been introduced in the securities market.

12 · 2. Under the aforesaid framework, AIs may avail flexibility in minimum investment amount ("Lower ticket size") or concessions from specific regulatory requirements applicable to investment products, subject to conditions applicable for specific products/ services under SEBI (Alternative Investment Funds) Regulations, 2012, SEBI (Portfolio Managers) Regulations, 2020 and SEBI (Investment Advisers) Regulations, 2013. The modalities of accreditation are provided in Annexure 8 .

12 · 3. Persons desirous of being reckoned as AIs shall approach an Accreditation Agency for accreditation. Accreditation Agencies shall be responsible for:

12 · 4. Accreditation Agencies shall have the requisite infrastructure including systems and manpower to fulfill their responsibilities as specified under para 12 . 3 above .

12 · 5. The following entities are eligible to carry out the accreditation process:

12 · 6. The framework for AIs shall be made available on the websites of accreditation agencies.

35 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DF9/P/CIR/2021/620 dated August 26, 2021 and SEBI Circular No. SEBI/HO/AFD/PoD1/CIR/2023/189 dated December 18, 2023

12 · 7. Accreditation Agencies , which are also KYC Registration Agencies (KRAs), may access Know Your Customer (KYC) documents of applicants available with them in capacity of KRA and may also access the same from the database of other KRAs, for the purpose of accreditation.

12 · 8. The Accreditation agencies shall grant accreditation solely based on the KYC and the financial information of the applicants.

12 · 9. To this effect, the accreditation certificate issued by accreditation agencies shall include the following disclaimer:

12 · 10. The validity period of the accreditation certificate is, as under:

12 · 10.1. If the applicant meets the eligibility criteria for preceding one financial year, the accreditation certificate issued shall be valid for a period of two years from the date of issuance.

12 · 10.2. If the applicant meets the eligibility criteria in each of the preceding two financial years, the accreditation certificate issued shall be valid for a period of three years from the date of issuance.

12 · 10.3. If the applicant is a newly incorporated entity, which does not have financial information for the preceding financial year but meets the applicable networth criteria as on the date of application, the accreditation certificate issued shall be valid for a period of two years from the date of issuance.

12 · 11. Pursuant to introduction of framework for "Accredited Investors" in the securities market, AIF Regulations were amended to provide certain relaxations from regulatory requirements to 'Large Value Fund for Accredited Investors' (LVF).

12 · 12. In terms of proviso to Regulation 12 of AIF Regulations, LVFs are exempt from filing their placement memorandum with SEBI through Merchant Banker and incorporate comments of SEBI, if any, in their placement memorandum i.e. LVFs can launch their scheme under intimation to SEBI.

36 · SEBI Circular No. SEBI/HO/AFD/RAC/CIR/2022/088 dated June 24, 2022

12 · 13. While filing the placement memorandum for LVF schemes with SEBI, a duly signed and stamped undertaking by Chief Executive Officer of the Manager of the AIF (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager of the AIF shall be submitted in the format as mentioned at Annexure 9 .

12 · 14. Regulation 13(5) of AIF Regulations permits close ended AIFs to extend its tenure up to two years with the approval of two-third of its unit holders by value of their investment in the said AIF, while the proviso to Regulation 13 (4) of AIF Regulations permits LVF to extend its tenure beyond two years, subject to terms of the contribution agreement, other fund documents and such conditions as may be specified by the Board from time to time. In this regard, it is specified as under:

12 · 14.1. In order to enable the investors to take an informed decision, the placement memorandum, contribution agreement or other fund documents of LVF shall lay down terms and conditions for extension of the tenure beyond two years.

12 · 14.2. LVF shall be required to obtain approval from its Trustee/Board of Directors/Designated Partners (depending upon the legal structure of the LVF) for extending the tenure beyond two years, at least one month before expiration of the fund tenure or extended tenure.

12 · 14.3. In case requisite conditions specified in the placement memorandum, contribution agreement or other fund documents of LVF for extension of tenure beyond two years are not fulfilled, LVF shall liquidate and wind up in accordance with AIF Regulations and Circulars issued thereunder.

37 · SEBI Circular No. SEBI/HO/AFD/RAC/CIR/2022/088 dated June 24, 2022

13 · 1. Appointment and designation of personnel of AIF and manager 38

13 · 1.1. AIFs shall ensure that Manager of AIF designates an employee or director as Compliance Officer who shall be a person other than Chief Executive Officer of the Manager or such equivalent role or position depending on the legal structure of Manager. The compliance officer shall be responsible for monitoring compliance with the provisions of the SEBI Act, AIF Regulations and circulars issued thereunder.

13 · 1.2. For the purpose of provisions of AIF Regulations, 'key management personnel' shall mean:

13 · 1.3. AIFs shall disclose the names of all the key management personnel of the AIF and Manager as specified in para 13 . 1.2 above, in their PPMs. Any change in key management personnel shall be intimated to the investors and the Board.

13 · 2. Appointment of custodian for AIFs 39

38 · SEBI Circular No. SEBI/HO/AFD/RAC/CIR/2022/088 dated June 24, 2022 and SEBI Circular No. SEBI/HO/IMD -I/DF6/P/CIR/2021/584 dated June 25, 2021

39 · SEBI Circular No. SEBI/HO/AFD/PoD/CIR/2024/5 dated January 12, 2024

13 · 2.1. The custodian for a scheme of an AIF shall be appointed prior to the date of first investment of the scheme.

13 · 2.2. Existing schemes of Category I and II AIFs having corpus less than or equal to INR 500 crore and holding at least one investment as on January 12, 2024 shall appoint custodian on or before January 31, 2025.

13 · 2.3. In case of AIFs with custodians that are associates of their manager or sponsor, managers of such AIFs shall ensure compliance with Regulation 20(11A) of AIF Regulations on or before January 31, 2025.

13 · 2.4. The information necessary to ascertain compliance with the provisions of this sub -chapter shall be incorporated in the format for quarterly reporting by AIFs in SEBI Intermediary Portal (www.siportal.sebi.gov.in). The manager of AIF shall provide the requisite information accordingly while submitting the quarterly report to SEBI.

13 · 3. Code of conduct40

13 · 3.1. All managers shall:

40 · SEBI Circular No. CIR/IMD/DF/7/2015 dated October 01, 2015

13 · 3.2. The AIF, manager, trustee and sponsor shall:

13 · 4. Stewardship Code 41

13 · 5. Other obligations 42

41 · SEBI Circular No. CIR/CFD/CMD1/168/2019 dated Dec 24, 2019

42 · SEBI Circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

14 · 1. In terms of Regulation 20(7) of AIF Regulations, Manager may constitute Investment Committee (by whatever name it may be called) to approve decisions of the AIF, subject to certain conditions. In terms of proviso to Regulation 20(8) of AIF Regulations, there is a requirement to furnish a waiver to AIF in respect of compliance with the said Regulation pertaining to responsibility of members of Investment Committee. The format for waiver to be furnished by the investors in this regard is specified in Annexure 11 .

14 · 2. For the purpose of Regulation 20(10) of AIF Regulations, consent of the investors of the AIF or scheme may not be required for change in ex-officio external members (who represent the sponsor, sponsor group, manager group or investors, in their official capacity), in the investment committee set up by the Manager.

14 · 3. While processing applications for registration of AIFs and launch of new schemes, it has been observed that the Manager of AIF often proposes to set up an Investment Committee with the mandate to provide investment recommendations or advice to the Manager. In some applications, the Investment Committee is mandated to approve the investment decisions of the AIF. Such Investment Committees may consist of internal members (employees, directors or partners of the Manager) and/ or external members. In this regard, SEBI has written to Government and RBI seeking clarity on the applicability of clause (4) of Schedule VIII under Foreign Exchange Management (Non-debt Instruments) Rules, 2019 , to investment made by an AIF whose Investment Committee approves investment decisions and consists of external members who are not 'resident Indian citizens'.

14 · 4. Pending clarification as mentioned at Para 14.3 above, the applications for registration of AIFs and launch of new schemes shall be dealt with as under:

43 · SEBI Circular No. SEBI/HO/IMD -I/DF6/P/CIR/2021/584 dated June 25, 2021 and SEBI circular No. SEBI/HO/IMD/DF6/CIR/P/2020/209 dated October 22, 2020

15 · 1. Reporting of investment activities by AIFs 44

15 · 1.1. All AIFs shall submit report on their activity as an AIF to SEBI on quarterly basis within 15 calendar days from the end of each quarter in the reporting format hosted by AIF Industry Associations – Indian Venture and Alternate Capital Association (IVCA) and Equalifi (hereinafter referred to as 'industry associations'), on their websites.

15 · 1.2. AIFs shall submit these reports online through SEBI intermediary Portal.

15 · 1.3. The industry associations shall assist all AIFs in understanding the reporting requirements and in clarifying or resolving any issues which may arise in connection with reporting , to ensure accurate and timely reporting.

15 · 1.4. To keep pace with the fast-changing landscape of AIF industry and for policy and supervision purposes, the aforesaid reporting format shall be reviewed periodically by industry associations / any AIF Standard Setting Forum in consultation with SEBI. In case of any revisions in the reporting format, revised format shall be made available on websites of industry associations / the AIF Standard Setting Forum at least 1 month prior to end of the quarter.

15 · 2. Compliance Test Report (CTR) 45

15 · 2.1. At end of financial year, the manager of an AIF shall prepare a compliance test report on compliance with AIF Regulations and circulars issued thereunder in the format as specified in the Annexure 12 .

15 · 2.2. The CTR shall be submitted within 30 days from the end of the financial year, to

44 · SEBI circular No. SEBI/HO/IMD/IMD -I/DOF6/CIR/2021/549 dated April 07, 2021 and SEBI circular no. SEBI/HO/AFD/SEC -1/P/CIR/2023/0155 dated September 14, 2023

45 · SEBI Circular No. CIR/IMD/DF/14/2014 dated June 19, 2014

15 · 2.3. In case of any observations/comments on the CTR, the trustee/sponsor shall intimate the same to the manager within 30 days from the receipt of the CTR. Within 15 days from the date of receipt of such observations/comments, the manager shall make necessary changes in the CTR, as may be required, and submit its reply to the trustee/sponsor.

15 · 2.4. In case any violation of AIF Regulations or circulars issued thereunder is observed by the trustee/sponsor, the same shall be intimated to SEBI as soon as possible.

15 · 3. Term Sheet -Angel Funds 46

15 · 3.1. Angel funds may launch schemes subject to filing of a Term Sheet in the format as specified in Annexure 13 .

15 · 3.2. Such Term Sheet shall contain material information regarding the scheme.

15 · 3.3. Such Term Sheet shall be filed with the Board within ten days of launching the scheme .

15 · 4. Reporting of investments of AIFs under custody 47

15 · 4.1. The pilot Standard Setting Forum for AIFs ('SFA'), in consultation with SEBI, shall formulate implementation standards for reporting data on investments of AIFs that are under custody with the custodian. Such standards shall specify the format and modalities of reporting of data by the manager of AIF to the custodian and subsequently, by the custodian to SEBI.

15 · 4.2. Managers of AIFs and custodians shall adopt and adhere to such implementation standards, formulated by the SFA in consultation with SEBI. Such standards are to be published on websites of the industry associations which are part of the SFA, i.e., Indian Venture and Alternate Capital Association (IVCA), PE VC CFO Association and Trustee Association of India.

46 · SEBI Circular No. CIR/IMD/DF1/102/2018 dated June 29, 2018

47 · SEBI Circular No. SEBI/HO/AFD/PoD/CIR/2024/5 dated January 12, 2024

16 · 1. Based on the request of the industry, it was considered appropriate that an industry benchmark be developed to compare the performance of AIF industry against other investment avenues, as well as global investment opportunities.

16 · 2. As the industry needs the flexibility to showcase its performance based on different criteria and benchmarking of performance of AIFs will help investors in assessing the performance of the AIF industry, it was decided to introduce:

16 · 3. In this regard, the following is mandated:

16 · 3.1. Any association of AIFs ("Association"), which in terms of membership, represents at least 33% of the number of AIFs, may notify one or more Benchmarking Agencies, with whom each AIF shall enter into an agreement for carrying out the benchmarking process. 49 Association will appoint Benchmarking Agencies and thereafter will set timeline for reporting of requisite data to Benchmarking Agencies by all the registered AIFs.

16 · 3.2. The agreement between the Benchmarking Agencies and AIFs shall cover the mode and manner of data reporting, specific data that needs to be reported, terms including confidentiality in the manner in which the data received by the Benchmarking Agencies may be used, etc.

16 · 3.3. AIFs, for all their schemes which have completed at least one year from the date of 'First Close', shall report all the necessary information including scheme -wise valuation and cash flow data to the Benchmarking Agencies in a timely manner.

16 · 3.4. The form and format of reporting shall be mutually decided by the Association and the Benchmarking Agencies.

16 · 3.5. If an applicant claims a track-record on the basis of India performance of funds incorporated overseas, it shall also provide the data of the investments of the said funds in Indian companies to the Benchmarking Agencies, when they seek registration as AIF.

48 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/24 dated Feb 05, 2020

49 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/99 dated June 12, 2020

16 · 3.6. In the PPM, as well as in any marketing or promotional or other material, where past performance of the AIF is mentioned, the performance versus benchmark report provided by the benchmarking agencies for such AIF/Scheme shall also be provided.

16 · 3.7. In any reporting to the existing investors, if performance of the AIF/Scheme is compared to any benchmark, a copy of the performance versus benchmark report provided by the Benchmarking Agency shall also be provided for such AIF/scheme.

16 · 4. The operational guidelines for performance benchmarking are provided at Annexure 14 .

16 · 5. In addition to the standard benchmark report prepared by the Benchmarking Agencies, if any , AIF seeks customized performance reports in a particular manner, the same may be generated by the Benchmarking Agencies, subject to:

16 · 6. The requirements as mentioned at para no.16 . 2 to 16 . 5 above shall not apply to Angel Funds registered under sub-category of Venture Capital Fund under Category I - AIF.

17 · 1. The Investor Charter is a brief document containing details of services provided to investors, details of grievance redressal mechanism, responsibilities of the investors etc., at one single place, in lucid language for ease of reference.

17 · 2. In this regard, all AIFs shall take necessary steps to bring the Investor Charter, as per Annexure 15, to the notice of their investors by disclosing Investor Charter in the Private Placement Memorandum (PPM).

17 · 3. Additionally, in order to bring about further transparency in the Investor Grievance Redressal Mechanism, data on investor complaints received against AIFs and each of their schemes and redressal status thereof shall be disclosed by all AIFs as per format at Annexure 16 , as a separate chapter in the PPM .

17 · 4. For effective monitoring, AIFs shall maintain data on investor complaints as per Annexure 18, which shall be compiled latest within 7 days from the end of quarter.

17 · 5. These disclosure requirements are in addition to the existing requirements pertaining to the investor grievance handling mechanism under various Regulations, circulars and directions, issued by SEBI.

50 · SEBI Circular No. SEBI/HO/IMD/IMD -I/DOF9/P/CIR/2021/682 dated December 10, 2021

18 · 1. Government vide Gazette notification S.O.116(E) dated January 08, 2020 notified the "Registrars to an Issue and/or Share Transfer Agents" (RTA) registered under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 as a "depository" for the limited purposes of acting as a "collecting agent" under the Indian Stamp Act, 1899 and the Rules made thereunder, only in case of instruments of transaction otherwise than through a recognized stock exchange or depository.

18 · 2. In this regard, AIFs have been mandated to comply with the applicable provisions of the Indian Stamp Act, 1899 and the Rules made thereunder regarding collection of stamp duty on sale, transfer and issue of units of AIFs with effect from July 01, 2020.

18 · 3. RTA appointed by AIFs shall collect the stamp duty on issue, transfer and sale of units of AIFs as stated in para 18.1 and 18.2 above , in compliance with the applicable provisions of the Indian Stamp Act, 1899 and the Rules made thereunder .

18 · 4. As regards transactions (issue, transfer and sale of units of AIFs in demat mode) through recognized Stock Exchange or Depository as defined under Securities Contract (Regulation) Act, 1956 and Depositories Act, 1996 respectively, the respective Stock Exchange/authorized Clearing Corporation or a Depository is empowered to collect stamp duty as per the amended Indian Stamp Act, 1899 and the Rules made thereunder.

51 · SEBI Circular No. SEBI/HO/IMD/DF6/CIR/P/2020/113 dated June 30, 2020

19 · 1. Fee for change in control of manager/sponsor or change in manager/sponsor of AIFs 52 :

19 · 1.1. A fee equivalent to the registration fee applicable to the respective category / sub -category of the AIF, shall be levied in case of change in control of manager/sponsor and in case of change in manager/sponsor. The cost paid towards such fee by manager/sponsor shall not be passed on to the investors of the AIF in any manner.

19 · 1.2. In case change in control of manager/change of manager and change in control of sponsor/change of sponsor of an AIF is proposed simultaneously, aforesaid fee equivalent to single registration fee shall be levied.

19 · 1.3. The aforesaid fee shall not be levied in the following cases for change in sponsor or change in control of sponsor:

19 · 1.4. The aforesaid fee shall be paid within 15 days of effecting the proposed change in manager/sponsor or change in control of manager/sponsor.

19 · 1.5. In case of the applications pending with SEBI as on November 17, 2022, for change in control of manager/sponsor or change in manager/sponsor, the requirement of fee shall be applicable only in those applications where none of the schemes of AIFs managed/sponsored by manager/sponsor had declared their First Close.

19 · 1.6. The prior approval granted by SEBI in this regard shall be valid for a period of 6 months from the date of SEBI communication for the approval.

19 · 1.7. Any change in control of manager/sponsor or change in manager/sponsor shall be carried out in compliance with provisions specified at para 2.5.4 and 2.5.5 above.

52 · SEBI circular no. SEBI/HO/AFD -1/PoD/P/CIR/2022/155 dated November 17, 2022

19 · 2. Change in control of Sponsor and/or Manager of AIF involving scheme of arrangement under Companies Act, 2013 53

19 · 2.1. The application seeking approval for the proposed change in control of the Sponsor and/or Manager of the AIF under Regulation 20(13) of AIF Regulations shall be filed with SEBI prior to filing the application with the NCLT;

19 · 2.2. Upon being satisfied with compliance of the applicable regulatory requirements, in-principle approval will be granted by SEBI;

19 · 2.3. The validity of such in-principle approval shall be three months from the date of issuance, within which the relevant application shall be made to NCLT;

19 · 2.4. Within 15 days from the date of order of NCLT, applicant shall submit the following documents to SEBI for final approval:

53 · SEBI Circular No. SEBI/HO/IMD -1/DF9/CIR/2022/032 dated March 23, 2022

20 · 1. All schemes of AIFs shall dematerialise their units in the following time frame:

20 · 2. The requirement of dematerialisation of units of AIFs as specified at para 20.1 above, shall not be applicable for schemes whose tenure (excluding permissible extensions in tenure) ends on or before April 30, 2024.

20 · 3. The terms of transfer of units of AIF held by an investor in dematerialised form shall continue to be governed by the terms of private placement memorandum ('PPM'), agreements entered between the AIF and the investors and any other fund documents.

20 · 4. The manager of AIF shall submit report on compliance with aforesaid provisions on SEBI Intermediary Portal (www.siportal.sebi.gov.in) in the format as specified therein and/or as part of quarterly regulatory reporting to SEBI, as the case may be .

20 · 5. Managers of AIFs shall continue to reach out to existing investors to obtain their demat account details and credit the units issued to them to their respective demat accounts. Depositories shall also aid in this process as advised by SEBI. In this regard, AIF industry and depositories shall adopt implementation standards as formulated by the pilot Standard Setting Forum for AIFs ('SFA'),

54 · SEBI Circular No. SEBI/HO/AFD/PoD1/CIR/2023/96 dated June 21, 2023

55 · SEBI circular no. SEBI/HO/AFD/PoD1/CIR/2023/186 dated December 11, 2023

20 · 6. Units already issued by schemes of AIFs to existing investors who have not provided their demat account details, shall be credited to a separate demat account named "A "Aggregate Escrow Demat Account". This account shall be opened by AIFs for the sole purpose of holding demat units of AIFs on behalf of such investors. New units to be issued in demat form shall be allotted to such investors and credited to the Aggregate Escrow Demat Account.

20 · 7. As and when such investors provide their demat account details to the AIF, their units held in Aggregate Escrow Demat Account shall be transferred to the respective investors' demat accounts within 5 working days. No transfer of units of AIFs from/within Aggregate Escrow Demat Account shall be allowed, other than for the aforesaid purpose.

20 · 8. The timeline for Schemes of AIFs with corpus ≥ INR 500 Crore to credit units already issued to existing investors (on-boarded prior to November 01, 2023) who had not provided their demat account details by then, into Aggregate Escrow Demat Account was January 31, 2024. Units already issued by such schemes to existing investors who had provided demat account details , were to be credited to respective investors' demat accounts at the earliest, but not later than January 31, 2024.

20 · 9. Schemes of AIFs with corpus < INR 500 Crore shall credit units issued to their investors who have not provided their demat account details by April 30, 2024, into Aggregate Escrow Demat Account latest by May 10, 2024. Units issued by such schemes as on April 30, 2024, to investors who have provided demat account details shall be credited to respective investors' demat accounts at the earliest, but not later than May 10, 2024.

20 · 10. Accordingly, the following is clarified with respect to issuance and credit of units of AIFs in demat form:

20 · 11. Units of AIFs held in Aggregate Escrow Demat Account can be redeemed and proceeds shall be distributed to respective investors' bank accounts with full audit trail of the same.

20 · 12. Managers of AIFs shall maintain investor-wise KYC details of units held in Aggregate Escrow Demat Account, including name, PAN and bank account details, along with audit trail of the transactions. The same shall also be reported to Depositories and Custodians on a monthly basis.

20 · 13. For this purpose, AIF industry shall adopt implementation standards as formulated by the SFA and depositories jointly, in consultation with SEBI, for compliance with the provisions of this circular. Such standards shall, inter-alia,

20 · 14. Managers of AIFs shall adhere to such implementation standards formulated by the SFA in consultation with SEBI. Such standards are published on websites of Depositories and the industry associations which are part of the SFA, i.e., Indian Venture and Alternate Capital Association (IVCA), PEVC CFO Association and Trustee Association of India.

20 · 15. The Depositories have been directed to:

20 · 15.1. make necessary amendments to the relevant Bye-laws, Rules and Regulations for the implementation of the provisions of this chapter, including facilitation of Aggregate Escrow Demat Account for AIFs;

20 · 15.2. put in place a system to facilitate that any transfer of units of AIF held in dematerialised form, which requires approval of the AIF/manager of AIF in terms of PPM or agreements entered between the AIF and the investors or any other fund documents, is carried out accordingly i.e. only after approval of AIF/manager of the AIF;

20 · 15.3. bring the provisions of this chapter to the notice of their members / participants and also disseminate the same on their websites.

21 · 1. Any investment made by an AIF on or after October 01, 2024 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 October 01, 2024 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.

21 · 3. The investments made by an AIF prior to October 01, 2024 which are covered under conditions as specified in paras 21.2.1 and 21.2.2 above, shall be held in dematerialised form by the AIF on or before January 31, 2025.

21 · 4. The aforesaid requirement of holding investments in dematerialised form shall not be applicable to:

21 · 4.1. Scheme of an AIF whose tenure (not including permissible extension of tenure) ends on or before January 31, 2025;

21 · 4.2. Scheme of an AIF which was in extended tenure as on January 12, 2024 .

21 · 5. The information necessary to ascertain compliance with the provisions of this circular shall be incorporated in the format for quarterly reporting by AIFs in SEBI Intermediary Portal (www.siportal.sebi.gov.in). The manager of AIF shall provide the requisite information accordingly while submitting the quarterly report to SEBI.

56 · SEBI Circular No. SEBI/HO/AFD/PoD/CIR/2024/5 dated January 12, 2024

22 · 1. Manner of valuation of AIF's investments

22 · 1.1. Valuation of securities for which valuation norms have already been prescribed under SEBI (Mutual Funds) Regulations,1996 ('MF Regulations'), shall be carried out as per the norms prescribed under MF Regulations.

22 · 1.2. Valuation of securities which are not covered in para 22.1.1 above, shall be carried out as per valuation guidelines endorsed by any AIF industry association, which in terms of membership represents at least 33% of the number of SEBI registered AIFs. The eligible AIF industry association shall endorse appropriate valuation guidelines after taking into account recommendations of Alternative Investment Policy Advisory Committee of SEBI.

22 · 1.3. The manager shall also disclose in PPM, the details of the valuation methodology and approach adopted under the stipulated guidelines for each asset class of the scheme of the AIF.

22 · 2. Responsibility of manager of AIF with regard to valuation of investments of AIF

57 · SEBI circular no. SEBI/HO/AFD/PoD/CIR/2023/97 dated June 21, 2023

22 · 2.1. At each asset level, in case there is a deviation of more than 20% between two consecutive valuations or a deviation of more than 33% in a financial year, the manager shall inform the investors the reasons/factors for the same, both generic and specific, including but not limited to changes in accounting practices/policies, assumptions/projections, valuation methodology and approach, etc. and reasons thereof.

22 · 2.2. Any change in the methodology and approach for valuation of investments of scheme of AIF, shall be construed as material change significantly influencing the decision of the investor to continue to be invested in the scheme of the AIF and the AIF shall adhere to process to be complied with in such cases as mentioned in provisions specified at para 2.5.4 and 2.5.5 above .

22 · 2.3. The manager shall disclose the following as part of changes in PPM to be submitted annually to SEBI and investors:

22 · 3. Eligibility criteria for Independent Valuer

22 · 3.1. The independent valuer shall not be an associate of manager or sponsor or trustee of the AIF.

22 · 3.2. The independent valuer shall have at least three years of experience in valuation of unlisted securities.

22 · 3.3. The independent valuer shall fulfil one of the following criteria:

22 · 4. Reporting of valuation of investments of AIF to performance benchmarking agencies

22 · 4.1. Manager of AIF shall ensure that a specific timeframe for providing audited accounts by the investee company to the AIF is included as one of the terms in subscription agreement / investment agreement with the investee company, so as to enable AIFs to report valuation based on audited data of investee companies as on March 31 to performance benchmarking agencies within the specified timeline of six months.

22 · 4.2. Manager of AIF shall ensure that valuation based on audited data of investee company is reported to performance benchmarking agencies only after the audit of books of accounts of the AIF in terms of Regulation 20(14) of AIF Regulations, within the stipulated timelines.

22 · 5. The manager of AIF shall submit report on compliance with the provisions of this circular on SEBI Intermediary Portal (www.siportal.sebi.gov.in) in the format as specified therein and/or as part of quarterly regulatory reporting to SEBI, as the case may be .

22 · 6. The provisions of this circular came into force with effect from November 01, 2023.

23 · 1. Liquidation Scheme:

23 · 1.1. During the Liquidation Period of a scheme of an AIF ('Original Scheme'), if the AIF decides to launch Liquidation Scheme, the AIF shall obtain consent of 75% of investors by value of their investment in the Original Scheme.

23 · 1.2. The scheme launched by the AIF for this purpose shall contain the words 'Liquidation Scheme' in its name.

23 · 1.3. Upon obtaining the requisite investor consent for launching Liquidation Scheme, the AIF shall arrange bid for a minimum of 25% of the value of the

58 · SEBI Circular No.: SEBI/HO/AFD/PoD1/CIR/2023/098 dated June 21, 2023

23 · 1.4. The AIF shall disclose the bid value, along with the valuation of the unliquidated investments carried out by two independent valuers, to all the investors of the Original Scheme.

23 · 1.5. The dissenting investors of the Original Scheme who did not consent to sell the unliquidated investments to the Liquidation Scheme, shall be offered an option to fully exit the Original Scheme out of the 25% bid arranged by the AIF/ manager. After exercising the exit option by aforesaid dissenting investors, any unsubscribed portion of the bid shall be used to provide prorata exit to non -dissenting investors.

23 · 1.6. If the bidder or its related parties are investors in the Original Scheme, they shall not be provided exit from the Original Scheme out of the bid. [Related party shall have same meaning as provided in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.]

23 · 1.7. Subsequently, the unliquidated investments of the Original Scheme shall be sold to the Liquidation Scheme. For capturing in the track record of the manager and for reporting to Performance Benchmarking Agencies, the value of such sale shall be –

23 · 1.8. Liquidation Scheme shall allot its units to the Original Scheme for purchasing investments from Original Scheme in the manner specified above.

23 · 1.9. Upon receipt of units of Liquidation Scheme, the Original Scheme shall mandatorily distribute such units of Liquidation Scheme in-specie in lieu of its units issued to investors.

23 · 1.10. The Liquidation Scheme shall be launched and Original Scheme shall be wound up, prior to the expiry of the Liquidation Period of the Original Scheme.

23 · 1.11. In terms of Regulation 29A(2) of AIF Regulations, Liquidation Scheme has been provided exemption, inter alia, from the requirement of obtaining SEBI's comments on the PPM. Accordingly, the tenure of the Liquidation

23 · 1.12. Liquidation Scheme shall not extend its tenure or sell its investments to another Liquidation Scheme. Further, Liquidation Period, as defined in Regulation 2(1)(pb) of AIF Regulations, shall not be available to Liquidation Scheme.

23 · 1.13. If an AIF (viz. A1) has invested in units of another AIF (viz. A2) and the investee AIF (i.e. A2) has launched a Liquidation Scheme, then the investor AIF (i.e. A1) upon expiry of its tenure or extended tenure, shall mandatorily distribute the units of Liquidation Scheme held by it, in-specie to its investors (i.e. investors of A1).

23 · 1.14. Performance of Liquidation Scheme shall also be reported to Performance Benchmarking Agencies, in terms of Chapter 16 of this Master Circular .

23 · 1.15. While obtaining the requisite investor consent, manager shall disclose to the investors that the value of the unliquidated investments sold to the Liquidation Scheme shall be in the manner given at para 23.1.7 above, for capturing in the track record of the manager and for reporting to Performance Benchmarking Agencies.

23 · 2. In specie distribution of unliquidated investments of a scheme

23 · 2.1. During the Liquidation Period of an Original Scheme of an AIF, if the AIF decides to distribute unliquidated investments in-specie, the AIF shall obtain consent of 75% of investors by value of their investment in the Original Scheme.

23 · 2.2. Upon obtaining the requisite investor consent for in-specie distribution of unliquidated investments, the AIF shall arrange bid for a minimum of 25% of the value of the unliquidated investments. The bid shall be arranged for units representing consolidated value of each unliquidated investment of the Original Scheme's investment portfolio.

23 · 2.3. The AIF shall disclose the bid value along with the valuation of the unliquidated investments carried out by two independent valuers to all the investors of the Original Scheme.

23 · 2.4. The dissenting investors of the Original Scheme who did not consent to inspecie distribution, shall be offered an option to fully exit the Original Scheme out of the 25% bid arranged by the AIF/ manager. After exercise of

23 · 2.5. If the bidder or its related parties are investors in the Original Scheme, they shall not be provided exit from the Original Scheme out of the bid. [Related party shall have same meaning as provided in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.]

23 · 2.6. Subsequently, the unliquidated investments shall be distributed in-specie. For capturing in the track record of the manager and for reporting to Performance Benchmarking Agencies, the value of such in-specie distribution shall be –

23 · 2.7. The in -specie distribution shall be carried out and Original Scheme shall be wound up, prior to the expiry of the Liquidation Period of the Original Scheme.

23 · 2.8. While obtaining the requisite investor consent, manager shall disclose to the investors that the value of the unliquidated investments distributed in-specie shall be in the manner given at para 23.2.6 above, for capturing in the track record of the manager and for reporting to Performance Benchmarking Agencies .

23 · 3. Mandatory in-specie distribution of unliquidated investments:

23 · 4. Responsibility for compliance:

23 · 4.1. The manager, trustee and key management personnel of AIF and manager shall be responsible for compliance with the procedure prescribed above.

23 · 4.2. The manager of AIF, upon exercising any of the options mentioned above, shall submit report on compliance with the provisions of this circular on SEBI Intermediary Portal (www.siportal.sebi.gov.in) in the format as specified therein and/or as part of quarterly regulatory reporting to SEBI, as the case may be .

23 · 4.3. The manager of AIF shall report the value, as specified above, with regard to sale of unliquidated investments to Liquidation Scheme or distribution of unliquidated investments in-specie, to Performance Benchmarking Agencies in a timely manner for the purpose of performance benchmarking. The manager shall also make suitable disclosure with regard to the same in the PPMs of subsequent schemes.

24 · 1. An AIF may excuse its investor from participating in a particular investment in the following circumstances:

24 · 1.1. If the investor, based on the opinion of a legal professional/legal advisor, confirms that its participation in the investment opportunity would be in violation of an applicable law or regulation; or

24 · 1.2. If the investor, as part of contribution agreement or any other agreement signed with the AIF, had disclosed to the manager that, participation of the investor in such investment opportunity would be in contravention to the internal policy of the investor. Manager shall ensure that terms of such agreement with the investor include reporting of any change in the disclosed internal policy, to the AIF, within 15 days of such change.

24 · 2. Further, an AIF may exclude an investor from participating in a particular investment opportunity, if the manager of the AIF is satisfied that the participation of such investor in the investment opportunity would lead to the scheme of the AIF being in violation of applicable law or regulation or would result in material adverse effect on the scheme of the AIF. The manager shall record the rationale for such exclusion, along with the documents relied upon, if any.

24 · 3. If the investor of an AIF is also an AIF or any other investment vehicle, such investor may be partially excused or excluded from participation in an investment opportunity, to the extent of the contribution of the said fund/investment vehicle's underlying investors who are to be excused or excluded from such investment opportunity. The manager of AIF shall record the rationale for such excuse or exclusion along with the supporting documents, if any.

59 · SEBI Circular No. SEBI/HO/AFD -1/PoD/P/CIR/2023/053 dated April 10, 2023

25 · 1. Direct Plan for schemes of AIFs

25 · 1.1. Schemes of AIFs shall have an option of 'Direct Plan' for investors. Such Direct Plan shall not entail any distribution fee/placement fee.

25 · 1.2. AIFs shall ensure that investors who approach the AIF through a SEBI registered intermediary which is separately charging the investor any fee (such as advisory fee or portfolio management fee), are on-boarded via Direct Plan only.

25 · 2. Trail model for distribution commission in AIFs

25 · 2.1. AIFs shall disclose distribution fee/placement fee, if any, to the investors of AIF/scheme of AIF at the time of on -boarding.

25 · 2.2. Category III AIFs shall charge distribution fee/placement fee, if any, to investors only on equal trail basis i.e. no upfront distribution fee/ placement fee shall be charged by Category III AIFs directly or indirectly to their investors. Further, any distribution fee/ placement fee paid shall be only from the management fee received by the managers of such Category III AIFs.

25 · 2.3. Category I AIFs and Category II AIFs may pay upto one-third of the total distribution fee/placement fee to the distributors on upfront basis, and the remaining distribution fee/ placement fee shall be paid to the distributors on equal trail basis over the tenure of the fund.

60 · SEBI Circular No. SEBI/HO/AFD/PoD/CIR/2023/054 dated April 10, 2023

1 · Eligibility Criteria for Accredited Investors

1 · 1. The following persons shall be eligible to be considered as Accredited Investors:

1 · 2. Foreign investor incorporated/established in form other than those mentioned at para 1.1. above shall be subject to eligibility criteria as applicable to Body Corporates.

1 · 3. In case of accreditation of individual investors, HUFs and Sole Proprietorships, the value of the primary residence of the individual, Karta of HUF and the Sole Proprietor respectively, shall not be considered for calculation of net worth.

1 · 4. In case of investments held jointly by more than one individual, the following conditions shall apply for eligibility as AI:

1 · 5. For the purpose of reckoning eligibility criteria, net worth of Body Corporates shall be calculated as under:

1 · 6. For the purpose of reckoning eligibility criteria, net worth of Trusts shall be calculated as under:

1 · 7. The eligibility of foreign investors to be accredited shall be determined on the basis of the rupee equivalent of their income and/ or net worth as applicable.

2 · Procedure for Accreditation

2 · 1.For accreditation, the prospective AI ("Applicant") shall make an application to the Accreditation Agency in the manner specified by the Accreditation Agency. Detailed documentation required for accreditation is provided at Annexure A given below .

2 · 2.Accreditation agencies, which are also KYC Registration Agencies (KRAs), may access Know Your Customer (KYC) documents of applicants available with them in capacity of KRA and may also access the same from the database of other KRAs, for the purpose of accreditation.

2 · 3.The Accreditation Agency shall issue the Accreditation Certificate to the Applicant. Each Accreditation Certificate shall have a unique accreditation number, name of the Accreditation Agency, PAN of the Applicant, validity of accreditation (start date and end date). The Accreditation Certificate shall include a disclaimer that the assessment of the applicant for accreditation is solely based on the applicant's KYC and financial information and does not in any way exempt market intermediaries and pooled investment vehicles from any due diligence required to be carried out of the accredited investors at the time of on-boarding them as their clients.

3 · Validity of Accreditation

3 · 1.If the applicant meets the eligibility criteria for preceding one financial year, the accreditation certificate issued shall be valid for a period of two years from the date of issuance.

3 · 2.If the applicant meets the eligibility criteria in each of the preceding two financial years, the accreditation certificate issued shall be valid for a period of three years from the date of issuance.

3 · 3.If the applicant is a newly incorporated entity, which does not have financial information for the preceding financial year but meets the applicable net-worth criteria as on the date of application, the accreditation certificate issued shall be valid for a period of two years from the date of issuance.

4 · Procedure to avail benefits linked to accreditation

4 · 1.Prospective investors shall, inter-alia, submit a copy of the Accreditation Certificate and an undertaking to the investment service provider to the effect that:

4 · 2.The investment service provider shall independently verify the status of accreditation of the prospective investor from the concerned Accreditation Agency. Further, investment service providers may obtain additional undertakings from prospective investors, provided they do not dilute or contravene the undertakings in terms of Para 4.1 above.

4 · 3.Prior to entering into a client agreement with an AI, the investment service provider shall disclose to the AI, details of the relevant conditions and regulatory concessions available for the proposed investment, applicable under the AI framework.

4 · 4.The client agreement between the investment service provider and AI shall, interralia, provide the following:

5 · Flexibility to investors to withdraw ‘Consent’

5 · 1.Accredited Investors shall have the flexibility to withdraw their 'Consent' and discontinue benefits of accreditation, subject to the following:

5 · 2.Investors in pooled investment products which are launched exclusively for AIs, in which concessions to regulatory framework have been availed, shall not have the flexibility to withdraw their Consent.

5 · 3.The client agreement between the investment service provider and AI shall, inter -alia, provide the modalities for withdrawal of 'Consent' and consequences of the investor withdrawing the 'Consent'.

10 ·

11 ·

12 ·

13 ·

14 ·

15 ·

16 ·

17 ·

18 ·

19 ·

20 ·

21 ·

1 · 1. Sharing of Private Placement Memorandum (PPM).

1 · 2. Account opening with the AIF:

2 · 1. Change in the sponsor or the manager of the AIF.

2 · 2. Change in control of the sponsor or the manager of the AIF.

2 · 3. Material changes to terms of PPM

2 · 4. Winding up of Fund/ Scheme prior to expiry of tenure.

3 · 1. Net Asset Value of Fund/ Scheme.

3 · 2. Financial information of investee companies.

3 · 3. Information on performance of scheme/fund.

4 · 1. Any inquiries/ legal actions by legal or regulatory bodies in any jurisdiction.

4 · 2. Any material liability arising during the tenure of the fund.

4 · 3. Any breach of a provision of the PPM or any other agreement made with the investor or any other fund documents.

4 · 4. Intimation regarding any conflict of interest.

4 · 5. Risks associated with the portfolio, such as concentration risk, foreign exchange risk, leverage risk, realization risk, strategy risk, reputation risk, extra -financial risks such as social and corporate governance risks etc. at fund and investee company level.

5 · 1. Non -material changes such as

6 · Grievance redressal

6 · 1. Redressal of investor complaints received directly from investors and/ or from SEBI / SCORES.

1 · Responsibility to inform and educate yourself

1 · 1. Read thoroughly all fund documents including Private Placement Memorandum, Contribution Agreement, sales literature, newsletters and understand the product.

1 · 2. Carefully consider all investment risks, fees, and/or other factors detailed in these documents.

1 · 3. Ensure and make certain that the proposed investment in the Fund meets your investment objective and is in alignment with your risk appetite.

1 · 4. Review your portfolio holdings, account statements and transaction confirmation on regular basis to ensure that you aware of all transactions and securities where you are invested.

2 · Responsibility to timely update your KYC and information with the Intermediary

2 · 1 Provide complete and accurate information in your KYC documents, including financial/ income status.

2 · 2 Timely updation of KYC information.

3 · Responsibility to abide by the contribution agreement.

3 · 1. The investor needs to read carefully and understand the agreement that he/she is entering into with the Alternative Investment Fund and abide by the terms thereof.

3 · 2. The investor should be aware that investment terms are not guarantee of future performance or returns of the Fund/ Scheme.

4 · 1. Carefully consider validity and reliability of investment information obtained from all sources, especially unsolicited information obtained over the Internet.

5 · 1. Investors shall not disclose any material non-public information that is received by virtue of being investors of the fund, except as may be guided by the terms of the fund documents.