SEBI Signals Potential ‘Lodge and Launch’ framework for AIFs

 The Chairman of the Securities and Exchange Board of India (SEBI) – Mr. Tuhin Kanta Pandey, at the IVCA Conclave 2026 held last week, outlined SEBI’s evolving agenda for India’s Alternative Investment Fund (AIF) ecosystem. The address highlighted both the rapid growth of the AIF industry and SEBI’s approach to strengthening governance while facilitating ease of doing business.

Key regulatory development – proposed ‘Lodge and Launch’ framework
SEBI is exploring the introduction of a ‘Lodge and Launch’ framework for AIF schemes. Under the current framework, AIF managers are required to file the scheme’s Private Placement Memorandum (PPM) with SEBI through a merchant banker prior to launch, following which SEBI may review the filing and issue comments that must be addressed before the scheme is launched. Under the proposed model:

·       Certain AIF schemes may be allowed to rely on due diligence certificates issued by merchant bankers for scheme launch.

·       For Accredited Investor (AI)-only schemes, the AIF manager would assume responsibility for disclosure due diligence.

Industry growth context
The AIF sector has expanded significantly in recent years:

·       1,700+ registered AIFs in India

·       Total commitments of approximately ₹15.74 trillion as of December 2025

·       Investments of approximately ₹6.45 trillion, reflecting strong capital deployment

The proposed framework is therefore aimed at accelerating capital mobilisation and improving ease of doing business for fund managers while ensuring investor protection.

Other key takeaways from the address:
• Accredited Investor framework gaining traction – SEBI indicated that the framework for accredited investors is gaining traction and that further measures are being explored to streamline the accreditation process.
• Mis-selling and product suitability concerns – SEBI highlighted the need for clear disclosure of risks and stronger risk-profiling practices, given that AIF products are designed for sophisticated investors.
• Valuation discipline – Emphasis was placed on transparent and credible valuation practices, particularly for early-stage and illiquid investments.
• Governance expectations – AIFs are expected to encourage stronger corporate governance practices in their portfolio companies, especially as such companies prepare for public listing.
• Reduced compliance burden – SEBI noted that recent steps to simplify reporting requirements aim to ease compliance while maintaining regulatory oversight.

Key Takeaway
The Chairman’s address reflects SEBI’s balanced regulatory approach supporting growth of the AIF ecosystem while maintaining continued emphasis on governance, investor protection, and market integrity. The proposed ‘Lodge and Launch’ framework, when implemented, could improve efficiency in AIF scheme launches and facilitate faster mobilisation of private capital in India.