AIF Cat I, II & III Registration

Types of AIFs

AIFs are categorized into three main types based on their investment strategies:

1. Category I AIF:

• Invests in socially or economically desirable sectors such as startups, infrastructure, and small and medium enterprises (SMEs).
• Generally enjoys incentives or concessions from the government.

• Comprises funds that do not fall under Category I or III and do not employ borrowing except for operational needs.
• Includes private equity and real estate funds without specific government incentives. 

• Employs complex trading strategies and may leverage investments in derivatives.
• Typically consists of hedge funds and funds aiming for short-term returns.

Benefits of SEBI AIF Registration

Obtaining SEBI AIF Registration allows eligible fund managers and sponsors to operate investment funds under a regulated structure.

Some important benefits include:

• Regulatory Recognition: Operate as a SEBI-registered Alternative Investment Fund.

• Investor Confidence: Provide investors with regulated fund management and disclosures.

• Investment Opportunities: Invest in permitted alternative asset classes.

• Capital Raising: Raise funds from eligible Indian and foreign investors through private placement.

• Fund Management: Manage investments according to a defined investment strategy.

SEBI Registration does not guarantee investment returns or remove investment risks.

Eligibility Criteria for AIF Registration

Applicants seeking AIF Category I, II or III Registration must meet the eligibility conditions prescribed by SEBI.

The main requirements include:

• The AIF must be established in India as a Trust, Company, LLP or other permitted body corporate.

• The applicant must follow SEBI rules and regulations.

• The fund must have a qualified and experienced management team.

• The minimum fund corpus should generally be ?20 crore.

• Each investor must generally invest at least ?1 crore.

• The sponsor or manager must contribute the required amount to the fund.

• The fund must have a clear investment plan and objectives.

• The applicant must have proper resources to manage the fund.

• The fund must raise money through private placement.

• All required documents must be submitted to SEBI for registration.

At least one key investment team member must hold the applicable NISM-Series-XIX-C certification, and the team must meet SEBI's professional qualification requirements.

Minimum Corpus & Investment Requirements

SEBI prescribes minimum investment and fund corpus requirements for Alternative Investment Funds.

These are general requirements for standard AIF schemes. Angel funds, accredited-investor arrangements, social impact funds and other special structures may have different conditions. The sponsor or manager must also maintain the continuing interest required by SEBI.

Documents Required for AIF Registration

The documents required for SEBI AIF Registration depend on the fund's legal structure and investment category.

Main document checklist:

1. Certificate of Incorporation or registered Trust Deed
2. PAN and registered office address proof
3. Memorandum and Articles of Association or LLP Agreement, as applicable
4. Details of sponsors, trustees and investment managers
5. Identity and address proofs of relevant persons
6. Investment strategy and proposed fund structure
7. Private Placement Memorandum (PPM), where applicable
8. Financial statements and net-worth certificates
9. Key investment team qualification and certification details
10. Fit and proper declarations and other SEBI undertakings

SEBI AIF Registration Process – Step by Step

The AIF Registration Process involves preparing the fund structure, submitting the application and obtaining SEBI approval.

Step 1: Select AIF Category

Choose Category I, II or III according to the proposed investment activities.

Step 2: Establish Legal Entity

Register the AIF as a trust, LLP, company or permitted body corporate.

Step 3: Prepare Documents

Collect the required documents, investment details, financial information and declarations.

Step 4: Submit SEBI Application

Apply through the SEBI Intermediary Portal using Form A and pay the application fee.

Step 5: SEBI Verification

SEBI examines the documents and may request additional information.

Step 6: Obtain Registration

After approval and payment of the applicable registration fee, SEBI grants the registration certificate.

AIF Registration Fees & Government Charges

The SEBI AIF Registration Fees depend on the category under which the applicant seeks registration.

The above amounts exclude applicable GST. Separate scheme filing charges, professional fees and other expenses may apply. Certain special fund structures have different fees.

Post-Registration Compliance for AIFs

After obtaining SEBI AIF Registration, fund managers must follow the applicable ongoing regulatory requirements.

Important AIF compliance requirements include:

• Periodic regulatory reporting and disclosures
• Investor KYC and applicable AML compliance
• Investment restrictions and concentration limits
• Valuation and financial reporting
• Annual compliance and audit requirements
• Maintaining fund and investor records
• Reporting material changes to SEBI
• Following applicable PPM and investor disclosure requirements

The exact requirements depend on the AIF category, scheme structure and applicable SEBI circulars.

Why Choose Compliance Calendar LLP for AIF Registration?

Choosing the right consultant for SEBI AIF Registration can make the registration process easier and more organised. Compliance Calendar LLP provides professional assistance for Category I, II and III AIF Registration in India. We help fund managers, sponsors and investors understand SEBI requirements, prepare documents and complete the registration process.