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TMI BlogFlexibility to Alternative Investment Funds (AIFs) and their investors to deal with unliquidated investments of their schemesX X X X Extracts X X X X X X X X Extracts X X X X ..... emes. Copy of the notification is available at link . 2. Dissolution Period: 2.1. Regulation 2(1)(ia) of AIF Regulations states as under dissolution period means the period following the expiry of the liquidation period of the scheme for the purpose of liquidating the unliquidated investments of the scheme of the Alternative Investment Fund. 2.2. Regulation 29(9) of AIF Regulations states as under Notwithstanding anything contained in sub-regulation (7), during liquidation period of a scheme, an Alternative Investment Fund may distribute investments of a scheme which are not sold due to lack of liquidity, in-specie to the investors or enter into the dissolution period, after obtaining approval of at least seventy five percent of the investo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIF / manager successfully arranges bid for a minimum of 25% of the value of unliquidated investments of the scheme, the dissenting investors of the scheme shall be offered an option to fully exit the scheme out of the 25% bid arranged by the AIF. After exercising the exit option by aforesaid dissenting investors, any unsubscribed portion of the bid may be used to provide pro-rata exit to non-dissenting investors should they opt for the same. 2.3.5. If the AIF / manager fails to arrange bid for a minimum of 25% of the value of unliquidated investments of the scheme, the AIF can still opt for Dissolution Period, provided that it obtains consent of at least 75% of the investors by value of their investment in the scheme of the AIF. 2.3.6. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssolution Period. 3. Mandatory in-specie distribution of unliquidated investments: 3.1. With regard to the proviso of Regulation 29(9) mentioned at para 2.2 above, the following is specified 3.1.1. During the Liquidation Period, if the AIF fails to obtain requisite investor consent for entering into Dissolution Period or in-specie distribution, then the unliquidated investments shall be mandatorily distributed to investors in-specie, without requirement of obtaining consent of 75% of investors by value of their investment in the scheme of the AIF. 3.1.2. The value of such investments distributed in-specie shall be recognised at one rupee for capturing the track record of performance of the manager and for reporting to Performance Benchmarki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification of AIF Regulations Amendment. In case a scheme has pending investor complaint(s) with respect to non-receipt of funds / securities, such scheme may avail the fresh Liquidation Period upon resolution of investor complaint(s). However, the fresh Liquidation Period shall be available only from the date of resolution of the complaint till April 24, 2025. 4.2.3. During the fresh Liquidation Period, the scheme shall fully liquidate its investments, or distribute the investments in-specie or opt for the Dissolution Period. 5. Responsibility for compliance : 5.1. The manager, trustee and key management personnel of AIF and manager shall be responsible for compliance with the procedure prescribed above. 5.2. The manager, upon exercising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Liquidation Scheme and for distributing the investments of AIFs in-specie , till such schemes are wound up. 7. This circular shall come into force with immediate effect. 8. This circular is issued with the approval of the competent authority. 9. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. 10. The circular is available on SEBI website at www.sebi.gov.in under the categories Legal framework - Circulars and Info for - Alternative Investment Funds . Yours faithfully, Sanjay Singh Bhati Deputy General Manager Tel no.: +91-22-2644922 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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