Getting a SEBI registration is a milestone for any Alternative Investment Fund (“AIF”). It is also where the real compliance work begins. Once the fund becomes operational, the regulatory focus shifts to how its obligations are implemented in practice. The SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) require detailed policies and procedures to govern fund decisions.
This article explains why policies matter for fund governance, which policies an AIF should have, and what can go wrong when they are missing or ignored.
A. Why Policies Matter After Registration?
The AIF Regulations require an AIF to have detailed policies and procedures. Their purpose is to make sure every fund decision follows the law and the fund documents. These policies and procedures are jointly approved by the investment manager and the relevant governing body and are required to be reviewed regularly, including where business developments warrant reconsideration.1 Documented
