Sebi issues list of changes to private placement memorandums that AIFs can report directly

Changes that must continue to be reported through the merchant banker include write up on market opportunity/Indian economy/Industry outlook; track record of investment manager; risk factors; and legal regulatory and tax considerations.

Changes in size of fund or scheme and in auditor /legal advisor/ tax advisor are some of modifications that alternative investment funds (AIFs) can make to their private placement memorandums (PPMs) and can submit directly to the market regulator.

PPMs contains details of the fund that investors need to make their decision.

The Securities and Exchange Board of India (Sebi) has released a list of changes that AIFs can submit directly to the regulator, without having to route it through the merchant banker. The list was issued on April 29.

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Earlier this month, the market regulator had proposed these changes, to facilitate ease of doing business.

In the latest circular, that made these proposals the norm, the regulator also included changes such as those made to contact details, in commitment period, reduction in any of the expense of fee or cost charge, other routine updates such as change in designation of qualification of members/directors, compliance officers and so on.

Changes in key management personnel of AIF or the manager too can be reported directly, unless the changes are due to change in control of manager or sponsor. Change in advisory board/advisory committee/investment committee or any other
committee too can be reported directly, unless such committees are set up to approve the decisions of the AIF.

Changes that must continue to be reported through the merchant banker include write up on market opportunity/Indian economy/Industry outlook; track record of investment manager; risk factors; and legal regulatory and tax considerations.

The circular also said that Large Value Fund for Accredited Investors (LVFs) will be exempted from the requirement of intimating any changes in the terms of PPM through a merchant banker.

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LVFs can directly file any changes in the terms of PPM with SEBI, along with a duly signed and stamped undertaking by CEO 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, in a prescribed format.