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ARTICLE · 29 APRIL 2026

SEBI Clarifies AIF's Managed By AMC's Are To Be Broad Based Under The Mutual Fund Regulations

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One such condition is that the pooled asset must be "broad based." Under Regulation 2(1)(f) of the MF Regulations, a broad-based fund is defined as one having at least 20 investors, with no single investor holding more than 25% of the corpus of such fund. In practice, this requirement has created interpretational challenges for AMCs that also manage AIFs (whether directly or through subsidiaries).

IndiaFinance and Banking
Sahil Shah
Sahil Shah
Payal Sarogi
Payal Sarogi
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The Securities and Exchange Board of India (SEBI), in its response to a request for informal guidance by UTI Alternatives Private Limited (UAPL), has clarified certain aspects of the SEBI (Mutual Funds) Regulations, 2026 (formerly the SEBI (Mutual Funds) Regulations, 1996) (the MF Regulations), particularly in relation to their applicability to alternative investment funds (AIFs) and their managers.

By way of background, managers of mutual funds are required to obtain registration as an asset management company (AMC) under the MF Regulations. The MF Regulations prescribe restrictions on the activities that may be undertaken by AMCs, including the provision of management and advisory services to "pooled assets," such as offshore funds, insurance funds, pension funds, provident funds, and certain categories of foreign portfolio investors (FPIs), subject to conditions specified by SEBI from time to time.1

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