SEBI Extends Deadline For AIF Differential Rights Reporting To March 31, 2025

The Securities and Exchange Board of India has extended the deadline for reporting differential rights issues by alternative investment funds to the end of March. This extension follows requests from the AIF industry, pushing the original deadline of Feb. 28, 2025, to March 31, 2025.

The one-time reporting requirement applies to AIFs that filed their Private Placement Memorandum with SEBI on or after March 1, 2020, and issued differential rights outside standard guidelines.

Previously, in November, SEBI amended the AIF Regulations, 2012, regarding investor rights in AIF schemes. In December, SEBI introduced guidelines for AIFs offering differential rights to certain investors, mandating that rights in investment and distribution of proceeds be granted in proportion to investors' commitments in a scheme.

In simple words, risks as well as rewards from investments made by an AIF scheme need to be shared in proportion to investors' contributions to the scheme.

This was aimed at clarifying the regulatory intent of AIFs' being pooled investment vehicles and ensuring fair and equal treatment of investors of an AIF.

SEBI stated that differential rights can be offered to select investors of a scheme of an AIF without affecting the interest of other investors of the scheme.

AIF is a privately pooled investment vehicle that collects funds from investors for investing under a defined investment policy for the benefit of its investors.

(With PTI Inputs)