TaxTMI 
TaxTMI 
Guidelines for Large Value Fund for Accredited Investors under SEBI (Alternative Investment Funds) Regulations, 2012 and Requirement of Compliance Officer for Managers of all AIFs
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....f SEBI, if any, in their placement memorandum i.e. LVFs can launch their scheme under intimation to SEBI. 3. While filing the placement memorandum for LVF schemes with SEBI, a duly signed and stamped undertaking by CEO of the Manager to the AIF (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager to the AIF shall be submitted in the format as mentioned at Annexure A. 4. In case of LVF schemes already filed with SEBI, similar duly signed and stamped undertaking by CEO of the Manager to the AIF (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager to the AIF shall be submitted to SEBI on or before July 31, 2022. Extension of tenure beyond two years 5. Regulation 13(4) of AIF Regulations permits close ended AIFs to extend its tenure up to two years with the approval of two-third of its unit holders by value of their investment in the said AIF, while the proviso to Regulation 13 (4) of AIF Regulations permits LVF to extend its tenure beyond two years, subject to terms of the contribution agreement, other fund documents and such con....
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....ertake that: 1. We have independently exercised due-diligence regarding information given in the placement memorandum, including the veracity and adequacy of disclosure made therein. 2. The AIF, its sponsor and manager are fit and proper persons based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. None of the intermediaries named in the placement memorandum have been debarred from functioning by any regulatory authority. 3. All the material disclosures in respect of the fund raising, investment by the scheme and management thereof have been made in the placement memorandum and are based on latest available information. 4. We have satisfied ourselves that the proposed activities of the scheme are bonafide, fall within the objectives of the fund as specified in the Articles of Association or Trust Deed or Partnership Deed of the AIF and are to meet the stated investment objective. 5. The disclosures made in the placement memorandum are true fair and necessary to enable the investors to make an informed decision with respect to the investment in the proposed scheme and such disclosures are in ac....
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.... 3(4)(c) Category III AIF 4 Eligibility Criteria 4(a) - Legal structure - Company; - Trust; - LLP 4(b) Whether prohibited from making an invitation to public 4(c) Whether Trust Deed is Registered 4(d) Whether partnership in case of Limited Liability Partnership is duly incorporated and the deed is filed with Registrar 4(e) Whether Body Corporate is set up or established under the laws of the Central or State Legislature and is permitted to carry activities on AIF 4(f) AIF, Sponsor, Manager (Fit & Proper person) 4(g) (i) Key Investment team of Manager of AIF - adequate experience (ii) Professional qualification 4(h) Necessary Infrastructure & Manpower 4(i) - Investment objective - Targeted investors - Proposed corpus - Investment style or strategy - Tenure of the fund or scheme 4(j) Refusal of reg....
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....p; 13 Tenure 13(1) - Category I & II AIF/scheme to be close ended 13(2) - Category I & II AIF/Scheme to have minimum tenure of 3 years 13(3) - Category III AIF/schemes - Whether open ended or close ended 13(4) - Extension of tenure 13(5) - Liquidation of AIF 14 Listing requirements, as and when made applicable 15 General Investment Conditions 15 (1)(a) - For Investment outside India 15 (1)(b) - Terms of Co-investment not more favourable than Manager /sponsor/co-investor than AIF 15 (1)(c) - Category I & II AIF - Not more than 25% of investible funds in an Investee Company - Large value fund for Accredited Investor may invest up to 50% of investible funds in an Investee Company 15 (1)(d) Category III AIF - Not more than 10% of investible funds or NAV in an Investee Company - Large value fund for ....
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....estors: - no profits or gains to accrue to the provider of such grants 16(4) (c) Grants to social ventures subject to disclosure 16(4) (d) Muted returns 16(5)(a) Infrastructure Funds investment - for at least 75% of investible funds 16(5)(b) Permissible other investments 17 Conditions for Category II Alternative Investment Funds 17(a) Category II AIFs to invest primarily in un-listed Companies or in units of Category I & II AIFs 17(c) May not borrow funds & shall not engaged in leverage except for meeting temporary requirements 17(d) May engage in hedging subject to guidelines as specified by the Board 17(e) May enter into agreement with Merchant Banker for market making 17(f) Exemption to Category II AIFs exemption from certain provision of SEBI (PIT) Regulations,2015 18 Conditions for Category III Alternative Investment Funds ....
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.... 19(M)(1) Special situation funds shall invest only in special situation assets and may act as a resolution applicant under the Insolvency and Bankruptcy Code, 2016 19(M)(2) Any investment by a special situation fund in the stressed loan acquired under clause 58 of the Master Direction - Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 as amended from time to time shall be subject to lock-in period as may be specified by the Board 5 Chapter IV - General Obligations And Responsibilities And Transparency 20 General Obligations 20(1) AIF, KMPs of AIF, Trustee, Trustee company, Directors of Trustee Company, Designated Partners or directors of AIF, manager and KMP of manager to abide by Code of Conduct 20(2) The Manager and either the trustee or trustee company or the Board of Directors or the designated partners of the Alternative Investment Fund to ensure compliances by AIF with code of conduct 20(3) AIFs to have detailed po....
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....vices 21 Conflict of Interest 21(1) Sponsor & Manager of the AIF to act in fiduciary capacity towards its investors 21(2) Manager to establish & implement written policies to mitigate conflict of interest 21(3) Manager & Sponsor of AIF to abide by high level principles on avoidance of conflict of interest 22 Transparency: All AIFs to ensure transparency & disclosure of information to investors on the following 22(a) financial, risk management, operational, portfolio, and transactional information regarding fund investments to be disclosed periodically to the investors 22(b) any fees ascribed or charged 22(c) Any enquiry /legal action as and when occurred 22(d) Any material liability during the tenure of AIF 22(e) Any breach of provisions of Placement Memorandum or Agreement 22(f) Change in control of the Sponsor or Manager or Investee Company 22(g) ....
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....Manager of AIF 4. Whether adequate disclosures are made in all sections and subsections of the placement memorandum in line with template placement memorandum provided vide SEBI circular dated Feb 5, 2020 5. Whether the scheme seeks waiver from requirement of placement memorandum as per template prescribed in SEBI Circular dated Feb 05, 2020 If yes, confirm whether it is disclosed that each investor shall commit a minimum capital contribution of INR 70 crores and provide a waiver from the requirement of placement memorandum in prescribed template. 6. Whether it is verified that information provided for a particular term is consistent across different sections of the placement memorandum If no, highlight the respective sections/clauses 7. Whether there are any clauses in the placement memorandum which affect the pro-rata rights of each investor in each investment of the scheme If yes, also highlight such clauses 8. Whether the investor(s) has/have any role in approving investment decisions of the scheme 9. Whether it is provided that ....
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....visions of AIF Regulations. • the terms of reference of the investment committee are disclosed in the placement memorandum 20. Whether it is disclosed that delegation/outsourcing of any activity of the AIF to a third party will be in compliance with SEBI circular dated Dec 15, 2011 21. Under section 'Track Record of Manager', whether there is provision for disclosure of performance benchmark disseminated by a benchmarking agency in terms of SEBI Circular dated February 05, 2020 22. Whether the eligibility criteria for each class of unit is clearly specified and differentiated 23. Whether specific instances are disclosed, under which an investor may be excluded or excused from a particular investment 24. Whether the list of commercial and non- commercial terms, on which differential rights may be offered through side letter arrangement or issuance of additional class of units, is disclosed If yes, provide the list of terms 25. Whether it is disclosed that the differential rights, if any, attached to any class....