Before they can begin operations, AIFs need to register with the Securities and Exchange Board of India (SEBI). AIFs are guaranteed to adhere to regulatory standards, maintain transparency, and safeguard investor interests via the registration process.
Procedure for obtaining registration as an AIF from SEBI
- AIF Category
AIFs are divided into three different categories depending on the fund’s unique investments, risk levels, and regulatory requirements. Category I involves investing in startups, small businesses and infrastructure projects. Category II includes private equity and debt funds and Category III involves hedge funds.
- Application Submission
Once you have decided on the AIF, fill in Form A and submit it to SEBI. The form includes details about the investment strategy, fund managers, fund’s structure and compliance with SEBI regulations.
- Submit the Documents
The applicant is required to submit necessary documents such as identity proof, proof of address, financial information of the investment manager, necessary declarations required for processing the application, details of shareholders or partners of the sponsor and investment manager, and key investment team members.
- Pay Registration Fees
Once the documents are submitted and the applicants have selected the type of category they want to invest in, the next step is to pay the non-refundable registration fees.
People who want to invest in Category I and Category II have to pay Rs 5 lakh and those who have opted for Category III have to pay Rs 15 lakh. However, those who want to invest in Angel Funds, which is a subcategory of Category I, have to pay Rs 1 lakh.
- Review your Application
SEBI will review your application and may also ask for additional information for clarification. The applicant is supposed to respond within the specified time.
- Registration Granted
Once all the verification is done, SEBI will issue a Certificate of Registration, allowing the AIF to operate legally in India.
