SEBI by a Notification dated May 5, 2021 and through a Clarification Circular on June 25, 2021 brought in the following major amendments to SEBI (AIF) Regulations, 2012 (‘AIF Regulations’):

i.     A revised definition of venture capital undertaking (‘VCF’) making Category I VCFs eligible to invest in non banking financial companies.

ii.    A code of conduct (‘Code’) has been introduced that applies to the AIFs, key management personnel, trustees (and their directors), designated partners of the AIF, AIF managers and key management personnel of the AIF manager and its investment committee (‘IC’).

iii.   Responsibility of IC members has been limited to ensuring their decisions are in compliance with the policies and procedures specified by the AIF and can further be waived with requisite number of investors under AIF Regulations in the prescribed format.

iv.   Subject to certain conditions, AIFs are now permitted to invest in portfolio companies as well as in other AIFs, without labelling themselves as funds of AIFs.

v.    Mandatory disclosure of all the key management personnel, as defined in Clarification Circular of the AIF and investment manager, in the PPMs and intimation of any change to the investors and the SEBI.

vi.   No consent required in case of change in ex-officio external members representing the sponsor, sponsor group, manager group or investors, in their official capacity, in the IC.