SEBI Circular Clarifies Pro-Rata and Pari-Passu Rights for AIF Investors; Compliance Required to Protect Interests.

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....The circular specifies the following key points regarding pro-rata and pari-passu rights of investors in Alternative Investment Funds (AIFs): Pro-rata rights: Investors shall have rights pro-rata to their commitment in each investment and distribution of proceeds, except when an investor is excused, defaulted, or sharing returns/losses with the manager/sponsor. Certain entities like the manager, multilateral institutions, etc. can subscribe to subordinated units. Existing AIFs with priority distribution models violating pro-rata rights cannot accept fresh commitments or make new investments. Pari-passu rights: Investors shall have equal rights, except differential rights permitted by SEBI without affecting other investors' interests. SEBI h.........