New SEBI Amendments Shake Up Alternative Investment Funds [Read Notification]
The Securities and Exchange Board of India (SEBI) has recently issued a notification announcing the changes made to Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. This regulation will now be known as Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025, and they are applicable from the date of their publication in the Official Gazette.
Changes in Sub-Regulation (1) of Regulation 2
Clause (fa) will be replaced with ” (fa) Co-investment” means investment made by a Manager or Sponsor or investor of a Category I or II Alternative Investment Fund in unlisted securities of investee companies where such a Category I or Category II Alternative Investment Fund makes investment;”
After Clause (fa), the clause “(fb) “Co-investment scheme” means a scheme of a Category I or Category II Alternative Investment Fund, which facilitates co-investment to investors of a particular scheme of an Alternative Investment Fund, in unlisted securities of an investee company where the scheme of the Alternative Investment Fund is making investment or has invested;” will be added.
The clause “(ra) “Shelf placement memorandum” means a placement memorandum filed by an Alternative Investment Fund for launching co-investment schemes;” will be added after clause (r).
The words and symbols in clause (z) named “an angel fund as defined under Chapter III-A and” will be replaced with the word “a“.
Changes in sub-regulation (4) of Regulation 3
After the words and symbols “SME Funds,” the words and symbols “angel funds” will be added.
The clause (b) in sub-regulation(1) of regulation 15 will be removed.
After regulation 17 and before regulation 18, a new regulation called “Conditions for co-investment by Category I and II Alternative Investment Funds.” will be added.
Changes in Regulation 19A
In sub-regulation (1), the words and symbols “Venture Capital Fund under” will be removed. Additionally, the words “angel investors” will be replaced by “accredited investors“.
The sub-regulation (2) is also being replaced with “(2) angel investor” means an accredited investor, or key management personnel of an angel fund or its manager, who invests in an angel fund.”
Regulation (3) will be replaced with “(3) “related party” shall have the same meaning as assigned to it under clause (zb) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.”
Changes in Regulation 19B
In sub regulation (1), the words and symbols “schemes launched by such angel funds.” will be replaced with “their managers, sponsors, angel investors and investments of angel funds.“.
In sub-regulation (1), the proviso named “Provided that the provisions of the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025 shall apply to angel funds registered prior to the notification of the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025, in the manner as may be specified by the Board.” will be added.
For complete details, refer to the following notification
