SEBI Streamlines PPM Filing for AIFs: No Prior Comments Required, 30-Day Timeline Introduced

Introduction

The Securities and Exchange Board of India (“SEBI“) issued a circular dated April 30, 2026, addressed to all Alternative Investment Funds (“AIFs“) and Merchant Bankers, introducing a fast-track mechanism for the processing of Private Placement Memorandums (“PPMs“) filed with SEBI. A PPM is essentially the key disclosure document through which an AIF presents information about its scheme to prospective investors.

Background and Need for Reform

To ensure minimum standards of disclosure in PPMs, SEBI introduced standard templates for PPMs through a circular dated February 05, 2020. Following this, by way of a circular dated October 21, 2021, SEBI made it mandatory for AIFs to file their PPMs with SEBI through a SEBI-registered Merchant Banker, i.e., a certified financial intermediary responsible for conducting due diligence on the AIF and its disclosures to streamline the process for launching new schemes or funds.

Under the procedure that existed before this Circular, once an AIF filed its PPM, SEBI would review the disclosures made in the PPM along with the Merchant Banker’s Due Diligence Certificate and provide its comments, if any, to the Merchant Banker or the AIF. The Merchant Banker or AIF would then make the necessary changes based on SEBI’s comments and resubmit the revised PPM to SEBI for its records. Only after this back-and-forth process was complete could the AIF proceed to launch its scheme. This process was time-consuming and delayed the actual deployment of investor capital.

Recognising this inefficiency, and after consulting with various stakeholders, SEBI has now decided to move to a fast-track system. Under this new approach, AIFs are not required to wait for SEBI’s comments before launching a scheme. They may proceed after 30 days from the date of filing, provided that no comments are issued during this period, or that any comments issued have been duly complied with. This change applies to PPMs filed by Angel Funds and all AIF schemes other than Large Value Funds for Accredited Investors (“LVFs“), collectively referred to as non-LVF schemes.

Key Features of the Fast-Track Mechanism

Launch of Scheme and Circulation of PPM

Under the new mechanism, an AIF may launch its non-LVF scheme and begin circulating the PPM to prospective investors for the purpose of raising funds after 30 days of filing its application with SEBI, unless SEBI specifically advises otherwise during that period.

For the first-ever scheme of an AIF, the AIF may proceed either from the date it receives its SEBI registration or after 30 days of filing its application with SEBI, whichever of these two dates falls later.

If SEBI provides any comments during the 30-day period, the Merchant Banker or AIF must address and comply with those comments before proceeding with the launch or circulating the PPM to investors.

Timeline for First Close

The first close of a scheme, that is, the first date by which the AIF collects a minimum committed amount from investors and formally closes initial fundraising, must take place within 12 months from the date the AIF becomes eligible to launch its scheme, as described above. To this extent, Para 2.3.1 of the SEBI Master Circular for AIFs dated May 07, 2024, stands modified.

Responsibility

The Merchant Banker and the Manager of the AIF are jointly responsible for ensuring that all disclosures made in the PPM of a non-LVF scheme are accurate and complete. This responsibility also extends to any declarations submitted by them to SEBI as part of the filing process.

Filing Requirements

The PPM of a non-LVF scheme must be filed on the SEBI intermediary portal. Along with the PPM, the following documents must be submitted, and the applicable scheme fee must be paid:

1. A duly signed Merchant Banker Due Diligence Certificate, confirming that the Merchant Banker has independently verified the disclosures in the PPM;
2. Duly signed Fit and Proper declarations in respect of the AIF, its Sponsor, and its Manager, as required under Schedule II of SEBI (Intermediaries) Regulations, 2008;
3. Declarations by the Sponsor and/or Manager confirming their minimum continuing financial commitment to the AIF or scheme; and
4. Copies of Permanent Account Numbers of the AIF, its scheme (if available), the Sponsor, Manager, Trustee, their respective directors or partners, and key investment team members.

Mandatory Disclaimer in the PPM

Every PPM of a non-LVF scheme must include a prescribed disclaimer, which must clearly state the following:

1. The Merchant Banker has independently carried out due diligence on all information and disclosures in the PPM and has certified the same in its Due Diligence Certificate submitted to SEBI.
2. The fact that an AIF has submitted its PPM to SEBI does not mean that SEBI has reviewed or approved it. SEBI does not take responsibility for the accuracy or correctness of the disclosures or for the ability or performance of the Manager; and
3. The Manager and Merchant Banker are responsible for ensuring that all information in the PPM is true, accurate and compliant with the SEBI (Alternative Investment Funds) Regulations, 2012 and other applicable laws, and that no material fact has been omitted.

If any irregularity or lapse is found in a PPM, the concerned entities will be liable for regulatory action.

Effective Date and Applicability

This Circular has come into force with immediate effect. It applies to all PPMs of non-LVF schemes, including those that were already pending with SEBI as on the date of the Circular. All other provisions of the Master Circular for AIFs dated May 07, 2024 continue to remain in force and unchanged.

Firm Takeaway

This Circular marks a meaningful shift in how AIF schemes are launched in India. Previously, AIFs had to wait for SEBI to review their PPM and revert before they could move forward with the process, which often caused delays. Now, AIFs can launch their non-LVF schemes after a fixed 30-day window, making the process faster and more predictable.

However, this greater speed comes with greater responsibility. Since SEBI is no longer required to review each PPM before launch under the fast-track mechanism, the Merchant Banker and AIF Manager are now fully accountable for ensuring that the PPM is accurate, complete and compliant with applicable law from the outset. Any lapse can result in regulatory action.

For AIFs, Merchant Bankers and fund managers, this reform underscores the importance of robust internal due diligence, careful documentation and strict compliance before filing, since there is no longer a safety net of SEBI’s pre-launch review to catch errors.