CIRCULAR
SEBI/HO/AFD/PoD1/CIR/2024/2 January 11, 2024
To,
All Alternative Investment Funds
Sir / Madam,
Sub: Foreign investment in Alternative Investment Funds (AIFs)
1. The Government of India through gazette notification dated March 07, 2023 and September
04, 2023 has amended the Prevention of Money Laundering (Maintenance of Records)
Rules, 2005, inter-alia, to revise the thresholds for determining the beneficial ownership.
2. In view of the amendments to the Prevention of Money-Laundering (Maintenance of
Records) Rules, 2005, para 4.1.2. under Chapter 4 of SEBI Master Circular No.
SEBI/HO/AFD/PoD1/P/CIR/2023/130 dated July 31, 2023 for AIFs stands modified as
mentioned below:
The investor, or its beneficial owner as determined in terms of sub-rule (3) of rule 9 of
the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, is not the
person(s) mentioned in the Sanctions List notified from time to time by the United
Nations Security Council and is not a resident in the country identified in the public
statement of Financial Action Task Force as –
(i) a jurisdiction having a strategic Anti-Money Laundering or Combating the
Financing of Terrorism deficiencies to which counter measures apply; or
(ii) a jurisdiction that has not made sufficient progress in addressing the deficiencies
or has not committed to an action plan developed with the Financial Action Task
Force to address the deficiencies.
3. In case an investor who has been already on-boarded to scheme of an AIF, does not meet
the revised condition as specified at para 2 above, the manager of the AIF shall not
drawdown any further capital contribution from such investor for making investment, until
the investor meets the said condition.
4. The provisions of this circular shall come into force with immediate effect.
5. This circular is issued with the approval of the competent authority.
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6. 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.
7. 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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