The Securities and Exchange Board of India (SEBI) on September 19, 2024, issued modification in the framework for the valuation of investment portfolio of AIFs.
The SEBI received representations from the AIF industry highlighting issues with regard to certain aspects of the valuation framework for AIFs. In this regard, based on the public comments on the consultation paper on “review of certain aspects of the framework for valuation of investment portfolio of AIFs”, recommendations of AIPAC and internal deliberations, the following has been decided:
The following clauses have been modified:
• Clause 22.1.1 of the Master Circular stands modified as under:
22.1.1 Valuation of securities, other than unlisted securities and listed securities which are non-traded and thinly traded, for which valuation norms have been prescribed under SEBI (Mutual Funds) Regulations, 1996 (‘MF Regulations’), shall be carried out as per the norms prescribed under MF Regulations.
• Clause 22.2.2of the Master Circular stands modified as under:
22.2.2 Change in valuation methodology/approach to comply with Clause 22.1 of Master circular for AIFs on 'Standardised approach to valuation of investment portfolio of AIFs', shall not be construed as 'Material Change'.
22.2.3 Change in methodology/approach within the valuation guidelines / valuation norms prescribed for AIFs, shall not be construed as a 'Material Change'. However, upon such change, the valuation of the investment carried out based on valuation methodologies/approaches, both old and new, shall be disclosed to the investors to ensure transparency.
The provisions of this circular shall come into force with immediate effect.
[Circular No. SEBI/HO/AFD/PoD-1/P/CIR/2024/123]
