SEBI proposes fast-track approval for alternative investment funds

Securities and Exchange Board of India (SEBI) has proposed a “green-channel” mechanism to significantly speed up the launch of Alternative Investment Fund (AIF) schemes by crunching approval timelines and easing compliance requirements for accredited-investor funds.

Under the proposed “Green-Channel: AIF Rollout Upon Document Acknowledgement” (GARUDA) framework, regular AIF schemes could be launched within 10 working days of filing placement documents with SEBI, compared with the current 30-day timeline.

For first-time schemes, launches would be permitted either from the date of SEBI registration or after 10 working days from filing, whichever is later.

The regulator has also proposed a lighter-touch regime for accredited investor-only schemes and angel funds.

Managers of such funds would be allowed to file placement memorandums directly with SEBI without routing them through merchant bankers.

In addition, the requirement for merchant banker due-diligence certificates would be replaced by undertakings from the AIF manager’s chief executive officer and compliance officer. These schemes could be launched immediately after filing documents with the regulator.

SEBI said the proposals would lead to faster deployment of capital as the AIF industry expands rapidly.

The number of AIFs has more than doubled over the past five years to 1,849 as of March 2026, while cumulative commitments have reached ₹15.74 lakh crore.

The regulator added that scrutiny of scheme documents would continue on a post-facto, risk-based basis, and entities would remain liable for any lapses or irregularities. Public comments on the consultation paper have been invited until June 1.

Published on May 11, 2026