SEBI, has on October 8, 2024, released a Circular (‘Circular’) on specific due diligence of investors and investments of Alternative Investment Funds (‘AIF’). Subsequently, the Standard Setting Forum of AIFs (‘SFA’), by way of a Notification dated October 9, 2024, has issued the implementation standards for due diligence to be conducted under the Circular (‘Implementation Standards’), to prevent AIFs from facilitating investors who are otherwise ineligible for: (i) qualified institutional buyer status under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018; (ii) qualified buyer (‘QB’) status on their own from availing benefits by way of the QB status accorded to AIFs under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and (iii) facilitating investors from land bordering countries to circumvent the Government approval requirements under Indian foreign exchange laws. Additionally, the Circular also introduced provisions to prevent the ever-greening of stressed loans/assets of RBI regulated lenders/entities through AIFs and to prevent circumvention of norms with respect to income recognition, asset classification, provisioning and restructuring of stressed loans/assets specified by the RBI for its Regulated Entities (‘REs’).