Sebi moots direct reporting of change in AIFs' private-placement memorandum

the Securities and Exchange Board of India (Sebi) has suggested a change for ease of doing business for AIFs.

The market regulator has proposed that any change in the private placement memorandum (PPM) of alternative investment funds (AIFs) be directly filed with the regulator and not routed through the merchant banker.

PPMs are documents that inform investors about basic details of an AIF.

Through a draft circular dated April 5, the Securities and Exchange Board of India (Sebi) has suggested a change for ease of doing business for AIFs.

As of now, if AIFs want to make any change in PPMs, they have submit the change through a merchant bank to Sebi. This has to be submitted along with a due diligence certificate from the merchant banker in a specified manner.

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Such changes in the terms of PPM and in the documents of the fund/scheme are required to be intimated to investors and SEBI on a consolidated basis, within one month of the end of each financial year.

The circular said, "To facilitate ease of doing business and rationalise cost of compliance for AIFs, it is proposed that changes in certain terms of PPM may not be required to be submitted through a merchant banker and may be filed directly with SEBI."

The circular also suggested that large-value fund for accredited investors (LVFs) also be exempted from the requirement of intimating any changes in the terms of PPM through a merchant banker. It suggested that LVFs 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 specified format.