SEBI has on December 13, 2024, issued a Circular which lays down the pro-rata and pari-passu rights of investors of AIFs (‘Circular’). The Circular, inter alia, specifies the limited circumstances under which the requirements of maintaining pro-rata rights may not be applicable to investors, alongside circumstances where specified entities may accept lesser returns in an investment of the AIF. Large value fund for accredited investors have been exempted from complying with these requirements subject to certain conditions. The Circular also specifies certain guiding principles based on which differential rights may be offered to select investors without affecting the rights of other investors. The Circular further states that standard setting forum for AIFs will, in consultation with SEBI, formulate the implementation standards prescribing the positive list of specific differential rights that may be offered by AIFs.