The Securities and Exchange Board of India (SEBI) on April 26, 2024, issued a notification regarding the Flexibility to Alternative Investment Funds (AIFs) and their investors to deal with unliquidated investments of their schemes.
The following has been stated namely: -
• This is in reference to the Securities and Exchange Board of India (Alternative Investment Funds) (Second Amendment) Regulations 2024.
• With respect to the dissolution period it has been stated: -
o Before seeking the requisite investor consent, the AIF/manager shall arrange a bid for a minimum of 25% of the value of its unliquidated investments.
• With respect to Mandatory in-specie distribution of unliquidated investments it has been stated namely: -
o During the Liquidation Period, if the AIF fails to obtain requisite investor consent for entering into the Dissolution Period or in-specie distribution, then the unliquidated investments shall be mandatorily distributed to investors in-specie, without the requirement of obtaining the consent of 75% of investors by value of their investment in the scheme of the AIF.
The circular shall come into force on April 26, 2024.
[Notification No. SEBI/HO/AFD/PoD1/CIR/2024/026]
