The Securities and Exchange Board of India (SEBI) has introduced a new framework called Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA) to help Alternative Investment Funds (AIFs) launch their schemes faster.
The new mechanism allows regular AIF schemes to go live 10 working days after filing the Private Placement Memorandum (PPM) with the regulator, unless SEBI raises any objections.
The framework, announced on Thursday, aims to reduce delays in launching investment schemes while keeping disclosure and due diligence requirements in place.
What Changes Under GARUDA?
Under the new system, regular AIF schemes can begin operations after a 10-working-day period from the date of filing the PPM through SEBI's Intermediary (SI) Portal. Earlier, fund managers had to wait for SEBI's review process before launching new schemes.
However, SEBI clarified that the first scheme of an AIF can be launched only after the fund receives its registration from the regulator or after 10 working days from filing the application, whichever is later.
The move follows recent amendments to the SEBI (Alternative Investment Funds) Regulations, 2026, which were introduced to simplify operational processes for AIFs.
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Merchant Bankers Continue To Play A Key Role
Although the launch timeline has been shortened, SEBI has retained strict due diligence requirements.
Before filing the PPM, the appointed Merchant Banker must independently verify that all disclosures are accurate, complete and comply with regulatory requirements. The Merchant Banker must also submit a due diligence certificate along with declarations related to the AIF, its sponsor, manager, minimum continuing interest commitment and PAN details of key entities.
SEBI has also made it clear that the Merchant Banker handling the filing cannot be an associate of the AIF, its sponsor, manager or trustee to ensure an independent review.
The regulator added that both the Merchant Banker and the AIF manager will be responsible for the accuracy of information disclosed in the PPM. Any misleading or incomplete disclosures may attract regulatory action.
Relief For Accredited Investor And Angel Funds
SEBI has introduced additional relaxations for Accredited Investor-only Funds (AI-only Funds), Large Value Funds (LVFs) and Angel Funds.
AI-only Funds and LVFs will no longer need to file their PPMs through a Merchant Banker or wait for SEBI's comments before launching new schemes. These funds can launch their schemes immediately after filing the PPM with SEBI, provided the fund has already received SEBI registration.
Angel Funds have also been exempted from the Merchant Banker filing requirement. They can begin circulating their PPMs to investors after receiving SEBI registration.
SEBI has also introduced new naming rules. Going forward, schemes meant only for accredited investors must include the words "AI only Fund" or "AIOF" in their names, while Large Value Funds must include "LVF".
The new GARUDA framework will apply to all AIF scheme PPMs filed after the notification of the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2026, with the regulator aiming to make fund launches quicker while maintaining transparency and investor protection.
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