SEBI extends broad-based fund rules to AIFs managed by AMCs and subsidiaries
SEBI extends broad-based fund rules to AIFs managed by AMCs and subsidiaries
Market regulator Securities and Exchange Board of India (SEBI) has clarified that asset management companies (AMCs) and their subsidiaries that provide management or advisory services to alternative investment funds (AIFs) must comply with the “broad-based fund” requirement, thereby extending the applicability of mutual fund norms to such pooled investment vehicles.
In an informal guidance issued on April 9 in response to a query from UTI Alternatives Pvt Ltd, SEBI said that AIFs qualify as pooled assets under the regulatory framework. Accordingly, the condition requiring a fund to have at least 20 investors, with no single investor holding more than 25 percent of the corpus, will apply to AIFs and their schemes when managed or advised by AMCs or their subsidiaries.
The regulator further clarified that compliance with the broad-based criteria must be assessed at the level of individual schemes rather than at the fund level. Under AIF regulations, each scheme is treated as a distinct investment vehicle for investor limits, corpus requirements, and compliance obligations. SEBI’s informal guidance letter stated," the broad-based requirement shall be assessed at the scheme level, as it reflects the actual investor composition of the pooled vehicle to which management/advisory services are rendered by the AMC or its subsidiaries".
AMC stocks will be on radar