SEBI Consolidates AIF Regulatory Framework Through New Master Circular
The Securities and Exchange Board of India (SEBI), on 03.06.2026 has issued a revised Master Circular for Alternative Investment Funds [HO/19/34/11(6)2025-AFD-POD1/I/12928/2026], superseding its earlier master circular dated 7 May 2024. The circular consolidates all regulatory instructions and clarifications issued under the SEBI (Alternative Investment Funds) Regulations, 2012 up to 31 May 2026, providing a single reference point for AIFs and market participants.
Key Regulatory Developments
The updated Master Circular incorporates several significant changes introduced through 21 circulars over the last two years:
| Date | Subject matter | Rescission status |
| 13.05.2024 | Certification requirement for key investment team of manager of AIF | Complete |
| 09.07.2024 | Information to be filed by schemes of AIFs availing dissolution period/additional liquidation period and conditions for in-specie distribution of assets of AIFs | Complete |
| 19.08.2024 | Modalities for migration of Venture Capital Funds registered under erstwhile SEBI (Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds) Regulations, 2012 | Partially rescinded to the extent it pertains to AIFs |
| 19.08.2024 | Guidelines for borrowing by Category I and Category II AIFs and maximum permissible limit for extension of tenure by LVFs | Complete |
| 19.09.2024 | Modification in framework for valuation of investment portfolio of AIFs | Complete |
| 08.10.2024 | Specific due diligence of investors and investments of AIFs | Complete |
| 13.12.2024 | Classification of Corporate Debt Market Development Fund (CDMDF) as Category I Alternative Investment Fund | Complete |
| 13.12.2024 | Pro-rata and pari-passu rights of investors of AIFs | Complete |
| 14.02.2025 | Relaxation in timelines for holding AIFs’ investments in dematerialised form | Complete |
| 03.03.2025 | Relaxation in timeline for reporting of differential rights issued by AIFs | Complete |
| 13.05.2025 | Extension of timeline for complying with the certification requirement for the key investment team of the Manager of AIF | Complete |
| 06.06.2025 | Extension of timeline of additional liquidation period for CVCFs migrating to SEBI (Alternative Investment Funds) Regulation, 2012 | Complete |
| 09.09.2025 | Framework for AIFs to make co-investment within AIF structure under SEBI (Alternative Investment Funds) Regulation, 2012 | Complete |
| 10.09.2025 | Revised regulatory framework for Angel Funds under AIF Regulations | Complete |
| 15.10.2025 | Relaxation in timeline for disclosure of allocation methodology by Angel Funds | Complete |
| 08.12.2025 | Modalities for migration to AI only schemes and relaxations to Large Value Funds for Accredited Investors under SEBI (Alternative Investment Funds) Regulation, 2012 | Complete |
| 30.12.2025 | Certification requirement for Compliance Officers Managers of AIFs | Complete |
| 09.01.2026 | Simplification of requirements for grant of accreditation to investors | Complete |
| 06.02.2026 | Reporting of value of units of Alternative Investment Funds (AIFs) to Depositories | Complete |
| 04.03.2026 | Regulatory reporting by AIFs | Complete |
| 30.04.2026 | Fasttrack mechanism for processing of placement memorandum | Complete |
Practical implications for AIFs and stakeholders:
- No re-filing or re-submission required: Applications already submitted to SEBI under the earlier circulars and pending consideration will continue to be processed under the corresponding provisions of the new Master Circular.
- Past actions remain valid: Any approvals, filings, disclosures, reports, investments, or other actions validly undertaken under the rescinded circulars remain legally effective and are deemed to have been taken under the new Master Circular.
- Existing rights and obligations continue: Rights, privileges, liabilities, obligations, and contractual arrangements arising under the earlier circulars are preserved and continue to be enforceable.
- Ongoing enforcement proceedings unaffected: Any investigations, regulatory proceedings, penalties, or enforcement actions relating to breaches of the rescinded circulars will continue notwithstanding the issuance of the new Master Circular.
- Compliance Test Report: The trustee / sponsor / manager of AIF shall ensure that the ‘Compliance Test Report’ includes compliance with the provisions of all chapters of the revised Master Circular.
While the Master Circular does not fundamentally alter the AIF regulatory framework, it serves as a comprehensive consolidation of SEBI’s directions, clarifications and operational requirements issued up to 31 May 2026.
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