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Core Purpose

The Securities and Exchange Board of India has issued the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

Detailed Summary

The Securities and Exchange Board of India (SEBI) notified the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, in Mumbai on November 18, 2025. These regulations, issued under the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) and clause (c) of sub-section (2) of Section 11 and sub-section (1) and (1B) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), come into force on their publication date in the Official Gazette. The amendments primarily modify the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. Key changes include the insertion of a new clause (ac) in sub-regulation (1) of regulation 2, defining "Accredited Investors only fund" as an Alternative Investment Fund (AIF) or scheme where every investor, excluding the Manager, Sponsor, or employees/directors of the AIF or Manager, is an Accredited Investor. Existing AIFs or schemes can convert to an "Accredited Investors only fund" or a "large value fund for accredited investors" subject to Board conditions. The word "seventy" is substituted with "twenty-five" in clause (pa) of regulation 2. A proviso is added to sub-clause (i) of clause (g) of regulation 4, exempting "Accredited Investors only fund" from its provisions. In regulation 10(f), a new proviso mandates the exclusion of accredited investors when computing the number of investors in an AIF scheme. Regulation 13(5) sees the substitution of "large value fund for accredited investors" with "Accredited Investors only fund" in both its first and second provisos. Furthermore, in regulation 20, a new proviso in sub-regulation (8) states its provisions do not apply to "large value fund for accredited investors," and "Large Value Fund for Accredited Investors" is replaced with "Accredited Investors only fund" in sub-regulation (22). A new sub-regulation (24) is inserted, stipulating that for an "Accredited Investors only fund," the responsibilities and obligations of a trustee shall be carried out by the fund's manager. The notification is identified by F. No. SEBI/LAD-NRO/GN/2025/274 and signed by Amit Pradhan, Executive Director.

Full Text

REGD. No. D. L.-33004/99 The Gazette of India CG-MH-E-19112025-267826 EXTRAORDINARY PART III—Section 4 PUBLISHED BY AUTHORITY No. 746] NEW DELHI, TUESDAY, NOVEMBER 18, 2025 SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 18th November, 2025 SECURITIES AND EXCHANGE BOARD OF INDIA (ALTERNATIVE INVESTMENT FUNDS) (THIRD AMENDMENT) REGULATIONS, 2025 F. No. SEBI/LAD-NRO/GN/2025/274.—In exercise of the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) and clause (c) of sub-section (2) of Section 11 and sub-section (1) and (1B) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, namely, 1. These Regulations may be called the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025. 2. They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, I. In sub-regulation (1) of regulation 2, i. after the clause (ab), the following clause shall be inserted, namely, - "(ac) "Accredited Investors only fund" means an Alternative Investment Fund or scheme of the Alternative Investment Fund in which each investor other than the Manager, Sponsor, employees or directors of the Alternative Investment Fund or employees or directors of the Manager, is an Accredited Investor: Provided that an Alternative Investment Fund or a scheme of an Alternative Investment Fund, launched prior to the notification of Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, may be permitted to convert to Accredited Investors only fund, subject to the conditions as may be specified by the Board. Explanation - 'Accredited Investors only fund' shall include 'large value fund for accredited investors'." ii. in clause (pa)- a. the word "seventy" shall be substituted with words "twenty-five". b. the following proviso shall be inserted, namely, - "Provided that an Alternative Investment Fund or a scheme of an Alternative Investment Fund, launched prior to the notification of the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, may be permitted to convert to a large value fund for accredited investors, subject to the conditions as may be specified by the Board." II. In sub-clause (i) of clause (g) of regulation 4, the symbol and word “; and” shall be substituted with the symbol ":" and thereafter, the following proviso shall be inserted, namely, - "Provided that the provisions of this sub-clause shall not apply to Accredited Investors only fund; and" III. In clause (f) of regulation 10, i. in the proviso, after the word "Provided", the word "further" shall be inserted. ii. before the existing proviso, the following new proviso shall be inserted, namely, - "Provided that accredited investors shall be excluded while computing the number of investor in a scheme of an Alternative Investment Fund:" IV. In sub-regulation (5) of regulation 13, i) in the first proviso, the words “large value fund for accredited investors” wherever appearing shall be substituted with the words "Accredited Investors only fund". ii) in the second proviso, the words "a large value fund for accredited investors" shall be substituted with the words "Accredited Investors only fund". V. In regulation 20, i) in sub-regulation (8), after the first proviso, the following new proviso shall be inserted, namely, - "Provided further that the provisions of this sub-regulation shall not apply to large value fund for accredited investors." ii) in the second proviso of sub-regulation (22), the words "Large Value Fund for Accredited Investors" shall be substituted with "Accredited Investors only fund". iii) after sub-regulation (23), the following new sub-regulation shall be inserted, namely, - "(24) The responsibilities and obligations of a trustee of an Alternative Investment Fund specified under these regulations shall, in case of an Accredited Investors only fund, be carried out by the manager of the Accredited Investors only fund." AMIT PRADHAN, Executive Director [ADVT.-III/4/Exty./483/2025-26] Footnote: 1. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were published in the Gazette of India on May 21, 2012 vide No. SEBI/LAD-NRO/GN/2012-13/04/11262. 2. The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were subsequently amended on, (a) 16th September, 2013 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/24/6573. (b) 23rd May, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/03/1089. (c) 26th September, 2014 by the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/11/1576. (d) 14th August, 2015 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2015 vide No. SEBI/LAD-NRO/GN/2015-16/011. (e) 4th January, 2017 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2016 vide No. SEBI/LAD/NRO/GN/2016-17/026. (f) 6th March, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037. (g) 1st June, 2018 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2018 vide No. SEBI/LAD/NRO/GN/2018/19. (h) 10th May, 2019 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/16. (i) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10. (j) 19th October, 2020 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/37. (k) 8th January, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/01. (l) 5th May, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/21. (m) 3rd August, 2021 by the (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD- NRO/GN/2021/30. (n) 3rd August, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/33. (o) 13th August, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2021 vide No. SEBI.LAD-NRO/GN/2021/41. (p) 9th November, 2021 by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/57. (q) 24th January, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/68. (r) 16th March, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/75. (s) 25th July, 2022 by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/89. (t) 15th November 2022, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/105. (u) 9th January 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/113. (v) 18th January 2023, by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/115. (w) 7th February 2023, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/121. (x) 15th June 2023, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/132. (y) 3rd July 2023, by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/137. (z) 17th August 2023, by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146. (aa) 5th January 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/163. (bb) 25th April 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/168. (cc) 18th July, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/194. (dd) 6th August, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fourth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/198. (ee) 18th November, 2024, by the Securities and Exchange Board of India (Alternative Investment Funds) (Fifth Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/209. (ff) 10th February, 2025, by the Securities and Exchange Board of India (Investor Charter) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/228. (gg) 23rd May 2025, by the Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/248. (hh) 9th September 2025, by the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/265. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054. AMIT KUMAR JAISWAL Digitally signed by AMIT KUMAR JAISWAL Date: 2025.11.19 21:57:48 +05'30"

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