The Securities and Exchange Board of India (SEBI) on January 12, 2024, issued Guidelines for AIFs for holding their investments in dematerialised form and appointment of custodian.
The following has been stated-
•Any investment made by an AIF on or after October 01, 2024, shall be held in dematerialised form only, irrespective of whether the investment is made directly in the investee company or is acquired from another entity.
•The investments made by an AIF before October 01, 2024, are exempted from the requirement of being held in dematerialised form, except in certain cases
•The investments made by an AIF before October 01, 2024, which are covered under conditions as specified shall be held in dematerialised form by the AIF on or before January 31, 2025.
•The custodian for a scheme of an AIF shall be appointed before the date of the first investment of the scheme.
•Existing schemes of Category I and II AIFs having a corpus less than or equal to INR 500 crore and holding at least one investment as of the date of this circular shall appoint a custodian on or before January 31, 2025.
•In case of AIFs with custodians that are associates of their manager or sponsor, managers of such AIFs shall ensure compliance with Regulation 20(11A) of AIF Regulations on or before January 31, 2025.
[Notification No. SEBI/HO/AFD/PoD/CIR/2024/5]
