SEBI Considers Expedited Framework for Alternative Investment Fund Scheme Launches

Securities and Exchange Board of India (SEBI) Proposes "Login and Launch" Framework for Alternative Investment Funds (AIFs)

Key Highlights:

• SEBI chairman Tuhin Kanta Pandey announced the exploration of a "login and launch" framework for AIFs to speed up fund launches and improve ease of doing business.
• The proposal aims to maintain governance standards while relying on merchant banker due-diligence certificates for certain AIF schemes.

Industry Growth:

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• As of December 2025, AIF commitments stood at approximately Rs 15.7 lakh crore and investments at about Rs 6.45 lakh crore, with a CAGR of close to 30% over the last five years.
• The AIF industry has expanded rapidly, with commitments nearing Rs 16 lakh crore.

Risk and Valuation Concerns:

• Pandey cautioned that private capital needs to take on more risk to fulfill the intended role of AIFs, particularly in innovation-led sectors.
• The regulator flagged concerns around mis-selling and valuation practices, given the illiquid nature of many AIF investments.

Regulatory Measures:

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• SEBI has introduced measures such as dematerialisation of AIF units and mandatory NAV reporting to depositories to improve transparency and monitoring.
• The regulator is working to simplify the accredited investor framework, which allows sophisticated investors greater flexibility in participating in investment products.

Accredited Investor Framework:

• The number of accredited investors has increased from 649 in May 2025 to 2,181 as of February 2026, reflecting growing participation in the segment.