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Standard Setting Forum for AIFs Releases Implementation Standards for Offering of Differential Rights to AIF Investors January 28, 2025
Published in: Investment Funds
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Securities and Exchange Board of India (“SEBI”), vide its notification dated November 18, 2024, had notified the SEBI (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 (“AIF Amendment Regulations”), thereby amending the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). The amendments were introduced with respect to maintaining pro-rata and pari-passu rights of investors in a scheme of an Alternative Investment Fund (“AIF”).
SEBI, vide its circular dated December 13, 2024 (“AIF Circular”) had further laid down the guidelines in respect of granting pro-rata and pari-passu rights of investors of AIFs.
The AIF Circular has specified that differential rights may be offered by AIFs to select investors without affecting the rights of other investors, based on the following guiding principles:
In this regard, Standard Setting Forum for AIFs (“SFA”) on January 28, 2025, has released the below mentioned implementation standards, prescribing the positive list of specific differential rights that may be offered by AIFs.
Further, (a) any information provided to select investors which elaborates AIF documents in line with the AIF Regulations and circulars and (b) right in the nature of providing specific treatment to select investors to comply with laws or regulations applicable to them, will not be considered as a differential right.
To read the AIF Amendment Regulations click here, to read the AIF Circular click here & to read the SFA Implementation Standards click here
For any clarification, please write to:
Mr. Yatin Narang
Partner
[email protected]
