pc
nid 93679
Jul 02, 2026
pthandapani@vixio.com
India
Securities and Exchange Board of India
financial services
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1801 charsIndia's Securities and Exchange Board Launches Consultation on Alternative Investment Fund Investor Consent Requirements
On June 30, 2026, the Securities and Exchange Board of India (SEBI) launched a consultation on rationalizing investor consent requirements and the scope of conflicted transactions under the SEBI (Alternative Investment Funds) Regulations, 2012.
The consultation addresses the framework governing when alternative investment fund (AIF) managers must obtain investor consent for transactions involving conflicts of interest. SEBI is seeking to streamline these requirements by examining which transactions genuinely require investor consent and refining the definition of conflicted transactions. This initiative aims to balance investor protection with operational efficiency for AIF managers, reducing unnecessary compliance burdens while maintaining appropriate safeguards. The rationalization effort recognizes that not all transactions presenting potential conflicts warrant the same level of investor approval, and SEBI intends to develop a more proportionate and risk-based approach. The consultation is significant for the AIF industry in India, including managers operating private equity funds, hedge funds, and other alternative investment structures. Clarifying these requirements will provide greater certainty for fund managers navigating their regulatory obligations and enhance the regulatory framework's effectiveness.
Stakeholders, including AIF managers, investors, and other market participants, are invited to submit comments on the consultation paper. Responses can be submitted through SEBI's public comments portal. The deadline for submissions and the expected publication date for SEBI's response to the consultation have not been specified in the available information.
REFERENCES:
https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes
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1836 charsSecurities and Exchange Board of India Launches Consultation on Alternative Investment Fund Investor Consent Requirements
The Securities and Exchange Board of India (SEBI) has issued a consultation paper on rationalizing the requirement of obtaining investor consent and the ambit of conflicted transactions under the SEBI (Alternative Investment Funds) Regulations, 2012.
The consultation paper contains:
New definitions proposing to introduce the term "related party" into the AIF Regulations, borrowing the definition from Section 2(76) of the Companies Act, 2013, to replace the narrower term "associate" specifically in the context of conflicted transactions.
Principles prescribing a standardized consent threshold, proposing to bring consistency by requiring a 75 percent unitholder approval (by value) for all material changes and conflicted transactions where a two-thirds majority is currently mandated.
Specific rules mandating the modalities for seeking investor consent, requiring AIFs to consistently follow a chosen methodology at the fund level and explicitly disclose it in their Private Placement Memorandums (PPMs).
Provisions outlining three proposed options for AIFs to calculate investor consent: "Deemed consent," "Present and voting," and "Express voting for approval," allowing managers operational flexibility while ensuring investor protection.
Administrative measures detailing the responsibility of the AIF manager to ensure transparency, provide equal voting opportunities to all investors regardless of the chosen methodology, and maintain comprehensive records of all communications, meetings, and votes.
Directives to exclude transactions with related parties of the AIF's trustees, Board of Directors, or designated partners from the ambit of conflicted transactions that require investor consent, recognizing their limited role in day-to-day fund operations.
Feedback may be submitted via this link by July 21, 2026