Business

Alternative Investment Funds Registration in India

Alternative investment fund is a general concept covering all funds that are not Undertakings for Collective Investment in Transferable Securities. Include hedge funds, private equity funds, real estate funds, commodity trading and other non-traditional asset managers. In short, Alternative investment fund registration is a process that allows the entrepreneur to invest the funds in any form of investment. This can be in the form of stocks, mutual funds, exchange traded funds and securities.

In today’s world, every business owner wants to make a lot of profit and wants to win the race of making more money. The Alternative investment fund registration is one such way that helps you to get your dreams fulfilled.

Since traditional types of investments are not good enough these days to make profits in a short period of time. Hence, people are looking for other alternatives which can help them to make huge profits easily.

Eligibility criteria for the Alternative investment fund registration

In other words, Any person can register as an Alternative Investment Fund under the SEBI (Alternative Investment Funds) Regulations, 2012. However, before making an application for registration of an AIF, The applicant must satisfy himself regarding his eligibility to be registered as an AIF Category in terms of the criteria set out in Regulation 3 of SEBI (Alternative Investment Funds) Regulations, 2012.

The eligibility criteria to register as a Category I, Category II and Category III AIF are given below:

Alternative investment funds categories

Category I AIF 

A person seeking registration as a Category I AIF shall not invest more than 25% of its scheme corpus in listed equity and equity linked instruments. These funds invest in start-ups and are subsidised by the SEBI, the government, or other regulatory bodies. Social venture funds, infrastructure funds, venture capital funds, and SME funds are among them.

Categorization II

On the other hand, These funds are allowed to invest in any combination and in any location, but they are not authorised to borrow money unless it is for day-to-day operations. This includes, private equity and debt funds.

Categorization III

This category includes open-ended AIFs such as hedge funds or funds that trade for short-term returns, as well as, other similar funds that get no specific concessions or incentives from the GOI or any other regulator.

Documents Required For Alternate Investment Fund Registration

  1. Certificate of incorporation and the memorandum and articles of association of the investment manager.
  2. List of directors, trustees and key personnel along with their profile, details in prescribed format.
  3. In the case of the AIF registration, the original Deed of Trust is sign by a society or trust that is registered under the Trusts Act of 1882.
  4. Details of proposed directors and officers.
  5. Audited financial statements for the last two years.
  6. Details of Directors to be appointed on the Board of Directors or trust deed
  7. Details of all promoters, trustees, directors/officers etc., along with their profile, details in prescribed format.
  8. Experience certificate and qualification details of all persons mentioned above in point 6 above
  9. Including those who are to be appointed as directors/officers etc.
  10. Copies of ID proof, address proof and PAN card copies of all persons mentioned above in point 6 above including those who are to be appointed as directors/officers etc.

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