Relaxing the need to inform about changes in the terms of a Private Placement Memorandum for Alternative Investment Funds through a Merchant Banker

 Vide Circular dated April 29, 2024 ("Circular"), the Securities and Exchange Board of India (SEBI) aims to streamline processes and reduce compliance costs for AIFs by relaxing the requirement for informing SEBI about changes in their Private Placement Memorandum (PPM) through a merchant banker, as earlier mandated by the Master Circular dated July 31, 2023.

SEBI reviewed the requirement and identified certain changes in the PPM that will no longer necessitate involvement of a merchant banker for submission to SEBI. To add, Large Value Funds for Accredited Investors (LVFs) are exempt from the requirement of intimating any changes in the terms of PPM through a merchant banker.

Annexure 'A' of the Circular specifically sets out those sections of the PPM where changes are exempted from merchant banker submission. These sections include:
(i) Market opportunity analysis
(ii) Investment manager track record
(iii) Risk factors
(iv) Legal, regulatory, and tax considerations.

Furthermore, Annexure 'A' of the Circular lists specific changes in the PPM that do not require submission through a merchant banker. These include changes in contact details, service providers, fund size, key personnel, committees, auditors, commitment period, fees, and disclosures as mandated by regulations.

Further, the Circular stipulates a format in Annexure 'B' for direct submission of the above mentioned changes to SEBI. It includes a confirmation by the AIF's CEO and Compliance Officer that changes comply with regulations and that disclosures are accurate and sufficient.

The circular is effective immediately upon issuance.