CIRCULAR
SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/100 July 09, 2024
To,
All Alternative Investment Funds
Sir/Madam,
Sub: Information to be filed by schemes of AIFs availing dissolution period/additional
liquidation period and conditions for in-specie distribution of assets of AIFs
A. Information Memorandum for schemes of AIFs entering into Dissolution Period –
1. Vide Securities and Exchange Board of India (Alternative Investment Funds)
(Second Amendment) Regulations 2024, notified on April 25, 2024, flexibility
has been provided to schemes of AIFs to opt for dissolution period to deal with
their unliquidated investments that are not sold due to lack of liquidity.
2. Subsequently, SEBI circular no. SEBI/HO/AFD/PoD1/CIR/2024/026 dated April 26,
2024, inter-alia, specified the modalities for schemes of AIFs entering into
dissolution period.
3. In terms of Regulation 29B(2) of SEBI (Alternative Investment Funds) Regulations,
2012 (‘AIF Regulations’), scheme of an AIF entering into dissolution period shall
file an information memorandum with SEBI through a merchant banker in the
manner as may be specified by SEBI.
4. In this regard, the following is specified –
4.1. The information memorandum for a scheme of an AIF entering into
dissolution period shall be submitted to SEBI before expiry of the
liquidation period or additional liquidation period of the scheme, as the
case may be.
4.2. The format for information memorandum to be submitted by the scheme
of AIF entering into dissolution period is given at Annexure I.
4.3. The format for Due Diligence Certificate by Merchant Banker to be
submitted along with the aforesaid information memorandum to SEBI is
given at Annexure II.
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B. Information to be submitted by schemes of AIFs availing additional liquidation
period –
5. In terms of regulation 29(9A) of AIF Regulations, if the liquidation period for a
scheme of an AIF has expired or is expiring within three months from the date of
notification of the Securities and Exchange Board of India (Alternative
Investment Funds) (Second Amendment) Regulations, 2024 (i.e., on or before
July 24, 2024), such schemes may be granted an additional liquidation period,
subject to conditions and in the manner as may be specified by SEBI. The
conditions in this regard have been specified in Para 4 of SEBI circular no.
SEBI/HO/AFD/PoD1/CIR/2024/026 dated April 26, 2024.
6. In this regard, schemes of AIFs which are intending to avail the additional/fresh
liquidation period in terms of aforesaid provisions, shall submit information to
SEBI regarding the same as per the format given at Annexure III, for grant of the
additional liquidation period.
C. In specie distribution of investments of AIFs –
7. In terms of Regulation 29(9) of AIF Regulations, para 23.2 of SEBI Master circular
no. SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/39 dated May 07, 2024 for AIFs and
para 3 of SEBI circular no. SEBI/HO/AFD/PoD1/CIR/2024/026 dated April 26,
2024 specify conditions and modalities for carrying out in specie distribution of
unliquidated investments of a scheme of an AIF during liquidation period and for
carrying out mandatory in specie distribution of unliquidated investments,
respectively.
8. Further, with respect to carrying out in specie distribution of investments of a
scheme of an AIF in terms of Regulation 29(8) of AIF Regulations, it is clarified
that such in specie distribution (other than the aforesaid mandatory in specie
distribution), shall be carried out after obtaining approval of at least seventy-five
percent of the investors by value of their investment in the scheme of the AIF.
9. The manager, trustee and key management personnel of AIF and manager shall
be responsible for compliance with the provisions prescribed above.
10. The trustee/ sponsor, as the case may be, shall ensure that the
‘Compliance Test Report’ prepared by the manager in terms of Chapter 15 of
SEBI Master Circular no. SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/39 dated May
07, 2024 for AIFs, includes compliance with the provisions of this circular.
11. This circular shall come into force with immediate effect.
12. This circular is issued with the approval of the competent authority.
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13. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, read with Regulation 29 and
Regulation 36 of AIF Regulations, to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
market.
14. 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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Annexure I
Format for information memorandum to be filed with SEBI by schemes of AIFs
availing the dissolution period
Sr. No Particulars Information
1. Name of the AIF
2. Category of the AIF
3. Registration no. of the AIF
4. Name of the Trustee/Board of
Directors/Designated Partners of the AIF (as per
the legal structure of the AIF)
5. Name of the Sponsor
6. Name of the Manager
7. Name of the scheme of AIF availing the dissolution
period
8. PAN No. of Scheme (if available)
9. Date of initial closing of the Scheme (in
dd/mm/yyyy)
10. Date of final closing of the Scheme (in
dd/mm/yyyy)
11. Tenure of the Scheme (in years)
12. Extension of tenure availed, if any (in years)
13. End date of tenure of the Scheme (including
extension of tenure availed, if any)
(in dd/mm/yyyy)
14. End date of liquidation period of the Scheme (in
dd/mm/yyyy)
15. Cumulative investments made by the Scheme
during its tenure (at Cost, in INR Crore)
16. Details of unliquidated investments held by
scheme at the time of entering into dissolution
period
- Number of investments held
- Cumulative (total) amount invested (at cost,
in INR Crore)
- Total value of investments as per latest
valuation (in INR Crore)
17. Tenure of the Dissolution Period (in years)
18. Percentage of investors consent/approval by value
of investment, received to avail dissolution period
19. Date of intimation to SEBI about the aforesaid
investor consent/approval and about opting for the
Dissolution Period
20. Percentage of value of unliquidated investments of
the scheme, for which bid has been arranged by
the AIF/manager
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Annexure II
Format for Due Diligence Certificate to be submitted along with Information
Memorandum to SEBI for availing dissolution period
To,
SECURITIES AND EXCHANGE BOARD OF INDIA
Dear Sir / Madam,
Sub.: Filing of information memorandum for availing dissolution period for (name of
scheme), scheme of (name of AIF)
On the basis of examination of information memorandum for availing dissolution
period, private placement memorandum (PPM) of the scheme, supporting documents
submitted by AIF and discussions held with AIF, its manager, sponsor, trustee, etc., we
hereby confirm that:
1. We have independently exercised due-diligence regarding compliance of the
AIF/aforesaid scheme of AIF with Regulation 29 of SEBI (Alternative Investment
Funds) Regulations, 2012 (‘AIF Regulations’) to exercise the option for entering
into dissolution period, including the veracity and adequacy of disclosures made in
the information memorandum.
2. The information provided by the AIF to verify compliance with Regulation 29 of AIF
Regulations and disclosures made in the information memorandum are true, fair,
based on latest available information and in accordance with the requirements of
Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012, circulars, guidelines issued thereunder and other applicable
legal requirements.
PLACE:
DATE:
Signature of authorised signatory of Merchant Banker
Name/designation of the authorised signatory, Name of Merchant Banker
Enclosed:
Annexure A - Information with respect to compliance with Regulation 29 of AIF
Regulations and disclosures in the information memorandum submitted for (name
of scheme) availing dissolution period, to be submitted along with the due
diligence certificate
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Annexure A
Information with respect to compliance with Regulation 29 of AIF Regulations and
disclosures in the information memorandum submitted for (name of scheme)
availing dissolution period, to be submitted along with the due diligence certificate
S.No. Particulars Yes/No Remarks
1. Whether the AIF / manager has disclosed the
following details to investors prior to seeking
their consent for opting of dissolution period
by the scheme of AIF –
i. Proposed tenure of the Dissolution Period,
ii. Details of unliquidated investments,
iii. An indicative range of bid value arranged
for a minimum of 25% of the value of its
unliquidated investments,
(representing consolidated value of all
unliquidated investments of the scheme’s
investment portfolio)
iv. Valuation of the unliquidated investments
carried out by two independent valuers.
2. Whether investors of the scheme have been
informed regarding the following before
seeking consent for dissolution period –
i. After obtaining approval of at least seventy-
five percent of the investors by value of
their investment in the scheme for entering
into dissolution period, in case the manager
fails to arrange bid for a minimum of 25% of
the value of its unliquidated investments,
the scheme can still opt for dissolution
period
ii. No further extension or Liquidation Period
shall be available to the scheme after the
expiry of Dissolution Period
iii. If the scheme of the AIF fails to sell the
unliquidated investments during the
Dissolution Period, such investments shall
be mandatorily distributed in-specie to the
investors
iv. The manager of the AIF shall not charge
management fee during the Dissolution
Period
v. The scheme of the AIF shall not accept any
fresh commitment from any investor and
shall not make any new investment during
the Dissolution Period.
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S.No. Particulars Yes/No Remarks
3. Whether approval of at least seventy five
percent of the investors by value of their
investment in the scheme of the AIF has been
obtained for entering into dissolution period?
4. Whether the AIF/manager intimated SEBI
about obtaining investor consent and
investors’ decision to enter dissolution period
prior to expiry of liquidation period of the
scheme?
5. Whether the tenure of the dissolution period
of the scheme more than original tenure of the
scheme?
6. Whether the AIF/manager arranged bid for a
minimum of 25% of value of unliquidated
investments of the scheme?
7. Whether dissenting investors were offered
option to exit the scheme out of the bid
arranged?
8. Whether unsubscribed portion of the bid, if
any, after offering exit to dissenting investors,
has been used to provide pro-rata exit to non-
dissenting investors, in case they opted for
exit?
9. Whether the bidder or its related party, who
are also investors of the scheme, have been
provided exit out of the bid from the bidder?
10. In case the scheme availed additional
liquidation period in terms of Regulation
29(9A) of AIF regulations, whether the scheme
had any pending investor complaint w.r.t non-
receipt of funds/securities at the time of
availing additional/fresh liquidation period?
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Annexure III
Format for information to be submitted to SEBI for scheme availing the additional
liquidation period in terms of Regulation 29(9A) of AIF Regulations
Sr. No Particulars Information
1. Name of the AIF
2. Category of the AIF
3. Registration no. of the AIF
4. Name of the Trustee/Board of
Directors/Designated Partners of the AIF (as
applicable as per the legal structure of the AIF)
5. Name of the Sponsor
6. Name of the Manager
7. Name of the scheme of AIF availing additional
liquidation period
8. PAN No. of Scheme (if available)
9. Date of initial closing of the Scheme (in
dd/mm/yyyy)
10. Date of final closing of the Scheme (in
dd/mm/yyyy)
11. Tenure of the Scheme (in years)
12. Extension of tenure availed, if any (in years)
13. End date of tenure of the Scheme (including
extension of tenure availed, if any)
(in dd/mm/yyyy)
14. End date of liquidation period of the Scheme (in
dd/mm/yyyy)
15. Cumulative investments made by the Scheme
during its tenure (at Cost, in INR Crore)
16. Details of unliquidated investments held by
scheme at the time of entering into dissolution
period
- Number of investments held
- Cumulative (total) amount invested (at
cost, in INR Crore)
- Total value of investments as per latest
valuation (in INR Crore)
17. Whether there are any pending investor
complaints with respect to non-receipt of
funds/securities, against the AIF/scheme of AIF
at the time of filing this information?
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