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ARTICLE · 29 NOVEMBER 2022

AIFs priority distribution model draws SEBI's attention – Regulator temporarily restricts such AIFs from accepting fresh commitment or making new investments

Economic Laws Practice
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In a major move, SEBI has decided to temporarily restrict Alternate Investment Funds (AIFs) schemes which have adopted priority distribution model among investors from accepting any fresh commitment...

IndiaFinance and Banking
Manendra Singh
Manendra Singh
Tanvi Goyal
Tanvi Goyal
Ambareen Khatri
Ambareen Khatri
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In a major move, SEBI has decided to temporarily restrict Alternate Investment Funds (AIFs) schemes which have adopted priority distribution model among investors from accepting any fresh commitment or making investment in a new investee company, till SEBI comes up with a view in this regard.

he aforesaid view was taken by SEBI vide SEBI circular dated November 23, 2022 ( available here) (SEBI Circular) and has been discussed below in brief:

  • The SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations) define "Alternative Investment Fund" as a privately pooled investment vehicle, which collects funds from investors, for investing it in accordance with a defined investment policy for the benefit of its investors.

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