SEBI AIF Regulations 2012: Full Compliance Checklist

Every entity wishing to pool capital as an AIF must obtain a Certificate of Registration from SEBI before soliciting a single investor.

☐ File Form A on the SI Portal

Applications go through SEBI's online SI Portal (siportal.sebi.gov.in), covering fund name, category and sub-category, sponsor and manager details, investment strategy, compliance officer, custodian, fee structure and tenure.

☐ Meet the "fit and proper" standard

The applicant, sponsor and manager are each assessed against Schedule II of the SEBI Intermediaries Regulations — integrity, financial soundness, absence of regulatory action or insolvency, and no outstanding dues to investors.

☐ Staff at least one qualified key person

The manager needs at least one key person with a professional qualification in finance, accountancy, business management, commerce, economics, capital markets or banking, plus adequate infrastructure and manpower.

☐ Engage a merchant banker for PPM due diligence

A merchant banker must review the Private Placement Memorandum and certify it before filing, except for Large Value Funds (LVFs) and Angel Funds, which are exempt.

☐ Budget four to eight months for approval

That's the typical span from filing to registration, though SEBI's Fast-Track Mechanism (from April 2026) lets a scheme begin soliciting investors 30 days after filing its PPM, provided SEBI raises no objection in that window.

02. STRUCTURAL REQUIREMENTS

Once registered, the fund's own terms have to sit inside a fixed set of structural limits.

☐ Choose an eligible legal form

Trust, LLP, company, or body corporate, incorporated or registered under Indian law. Trusts — governed by a trust deed under the Indian Trusts Act, 1882 — are by far the most common.

☐ Register in the correct category

Category I (VC, SME, social venture, infrastructure funds), Category II (private equity and debt funds using no leverage beyond day-to-day needs), or Category III (funds using diverse or complex trading strategies, including leverage).

☐ Hold minimum corpus of ₹20 crore

₹10 crore for Angel Funds specifically. The fund's corpus at first close must not fall below the prescribed minimum for its category.

☐ Respect investor minimums and caps

₹1 crore minimum commitment per investor (₹25 lakh for directors, employees and fund managers of the AIF, and for angel fund investors), and no more than 1,000 investors per scheme — 50 for Angel Funds.

☐ Maintain continuing interest ("skin in the game")

Sponsor and/or manager must hold at least 2.5% of corpus or ₹5 crore (whichever lower) for Category I/II, and 5% of corpus or ₹10 crore (whichever lower) for Category III — funded as real capital, never through a management-fee waiver.

☐ Appoint a custodian above ₹500 crore corpus

Mandatory under Regulation 19 once the fund's corpus exceeds ₹500 crore, regardless of category.

03. ONGOING OPERATIONAL DUTIES

Registration is the start, not the finish — Regulation 21 keeps the manager and sponsor on the hook for everything the fund does afterward.

☐ Act within the disclosed strategy

All activity must stay within the objectives and strategy disclosed in the PPM; departing from it without investor consent is itself a compliance breach.

☐ Uphold fiduciary duty to investors

Regulation 21(3) requires the manager to act in a fiduciary capacity toward investors at all times, not merely at the point of onboarding.

☐ Manage conflicts of interest

Regulation 20 requires the manager and sponsor to identify and address conflicts — related-party transactions, co-investment terms, and fee arrangements with affiliates chief among them.

☐ Never solicit the public

AIFs are explicitly barred from inviting or soliciting subscriptions from the general public — placement must stay private.

☐ Keep leverage within category limits

Category I and II funds may not borrow beyond short-term, day-to-day operational needs; Category III funds follow separate, tighter leverage caps set out in the regulations.

04. DISCLOSURE & REPORTING

This is the part SEBI has revised most recently — know the current filing calendar, not the one from a few years ago.

☐ File the annual PPM audit

Regulation 28 requires an annual audit of compliance with PPM terms, filed with the trustee (or board/designated partners) and SEBI within six months of financial year end, in SEBI's standardised reporting format via the SI Portal.

☐ Apply the PPM audit exemptions correctly

Angel Funds and funds where every investor commits at least ₹70 crore are exempt from the audit itself. Funds that haven't raised any capital yet file a Chartered Accountant's certificate confirming that, instead.

☐ Follow the current activity-reporting cycle

SEBI's 2026 framework replaced the old full quarterly filing with an annual activity report plus a limited-scope quarterly report — check that your filing calendar reflects this, not the pre-2026 schedule.

☐ Hit the SI Portal filing windows

Routine filings run on 15- and 30-day windows from the relevant trigger event; consistent on-time filing is itself treated by SEBI as a signal of a fund's operational discipline.

☐ Disclose material changes to investors

Regulation 23 requires disclosure of financial, risk, operational and portfolio information; fees paid to the manager, sponsor or their associates; legal or regulatory inquiries; material liabilities; breaches of fund documents; and any change in control of the sponsor, manager or an investee company.

This checklist is a starting map, not a substitute for counsel. The AIF Regulations are amended regularly — most recently in April 2026 — and category-specific obligations (particularly for Category III and Angel Funds) carry additional detail not covered here. Confirm current requirements against SEBI's own regulation text and circulars, or with a securities lawyer, before relying on any of this for an actual filing.

Based on the SEBI (Alternative Investment Funds) Regulations, 2012, as last amended, and associated SEBI master circulars. This is general information, not legal or compliance advice.