CIRCULAR
SEBI/HO/IMD/IMD-I/DOF6/P/CIR/2022/0000000037 March 28, 2022
To,
All Alternative Investment Funds (AIFs)
Sir/Madam,
Sub: Calculation of investment concentration norm for Category III AIFs
1. Regulation 15(1)(d) of SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF
Regulations”), has been amended and notified on March 16, 2022, to provide flexibility
to Category III AIFs, including large value funds for accredited investors of Category III
AIFs, to calculate investment concentration norm based either on investable funds or
net asset value (“NAV”) of the scheme while investing in listed equity of an investee
company, subject to the conditions specified by the Board from time to time. Copy of
the notification is available at link.
2. In this regard, the following is specified:
2.1. Existing Category III AIFs may opt for calculating investment concentration norm
based on investable funds with the approval of their trustees or board of directors or
designated partners, as the case may be, and inform the same to their investors
within 30 days from the date of the issuance of this circular.
2.2. All Category III AIFs shall disclose the basis for calculation of investment concentration
norm in the placement memorandum of their schemes.
2.3. The basis for calculating investment concentration norm shall not be changed during
the term of the scheme.
2.4. Category III AIFs which choose to calculate investment concentration norm based on
NAV, shall comply with para 2 of SEBI circular no. SEBI/HO/IMD/IMD-
I/DOF6/P/CIR/2021/663 dated November 22, 2021.
3. This circular shall come into force with immediate effect.
4. This circular is issued with the approval of the competent authority.
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5. 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.
6. 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.: +91-22-26449222
ssbhati@sebi.gov.in
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