TMI BlogGuidelines for Large Value Fund for Accredited Investors under SEBI (Alternative Investment Funds) Regulations, 2012 and Requirement of Compliance Officer for Managers of all AIFsX X X X Extracts X X X X X X X X Extracts X X X X ..... if any, in their placement memorandum i.e. LVFs can launch their scheme under intimation to SEBI. 3. While filing the placement memorandum for LVF schemes with SEBI, a duly signed and stamped undertaking by CEO of the Manager to the AIF (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager to the AIF shall be submitted in the format as mentioned at Annexure A. 4. In case of LVF schemes already filed with SEBI, similar duly signed and stamped undertaking by CEO of the Manager to the AIF (or person holding equivalent role or position depending on the legal structure of Manager) and Compliance Officer of Manager to the AIF shall be submitted to SEBI on or before July 31, 2022. Extension of tenure beyond two years 5. Regulation 13(4) of AIF Regulations permits close ended AIFs to extend its tenure up to two years with the approval of two-third of its unit holders by value of their investment in the said AIF, while the proviso to Regulation 13 (4) of AIF Regulations permits LVF to extend its tenure beyond two years, subject to terms of the contribution agreement, other fund documents and suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIF/proposed AIF, we undertake that: 1. We have independently exercised due-diligence regarding information given in the placement memorandum, including the veracity and adequacy of disclosure made therein. 2. The AIF, its sponsor and manager are fit and proper persons based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. None of the intermediaries named in the placement memorandum have been debarred from functioning by any regulatory authority. 3. All the material disclosures in respect of the fund raising, investment by the scheme and management thereof have been made in the placement memorandum and are based on latest available information. 4. We have satisfied ourselves that the proposed activities of the scheme are bonafide, fall within the objectives of the fund as specified in the Articles of Association or Trust Deed or Partnership Deed of the AIF and are to meet the stated investment objective. 5. The disclosures made in the placement memorandum are true fair and necessary to enable the investors to make an informed decision with respect to the investment in the propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternative Investment Funds 3(1) New Fund registration 3(4)(a) Category I AIF 3(4)(b) Category II AIF 3(4)(c) Category III AIF 4 Eligibility Criteria 4(a) - Legal structure Company; - Trust; - LLP 4(b) Whether prohibited from making an invitation to public 4(c) Whether Trust Deed is Registered 4(d) Whether partnership in case of Limited Liability Partnership is duly incorporated and the deed is filed with Registrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsor 10(f) Maximum Investors 10(g) To solicit or collect funds only by way of Private placement 11 Placement Memorandum 11(1) - Placement Memorandum / Information Memorandum 11(2) - Information about a) AIF b) Manager c) Background of key investment team of Manager d) Targeted investors e) Fees all other expenses proposed to be charged f) Tenure of AIF/Scheme g) Condition/Limits on redemption h) Investment strategy i) Risk management tool parameters employed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(c) - Category I II AIF - Not more than 25% of investible funds in an Investee Company - Large value fund for Accredited Investor may invest up to 50% of investible funds in an Investee Company 15 (1)(d) Category III AIF - Not more than 10% of investible funds or NAV in an Investee Company - Large value fund for Accredited Investor may invest up to 20% of investible funds or NAV in an Investee Company 15 (1)(da) AIF not to offer their units to other AIFs if they are investing in units of other AIFs 15 (1)(e) Approval of 75% of investors by value for investment in associate or units of AIF managed by Manager, sponsor or by Associates 15 (1)(f) Investment of un-invested portion of investable f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dited investors: - no profits or gains to accrue to the provider of such grants 16(4) (c) Grants to social ventures subject to disclosure 16(4) (d) Muted returns 16(5)(a) Infrastructure Funds investment - for at least 75% of investible funds 16(5)(b) Permissible other investments 17 Conditions for Category II Alternative Investment Funds 17(a) Category II AIFs to invest primarily in un-listed Companies or in units of Category I II AIFs 17(c) May not borrow funds shall not engaged in leverage except for meeting temporary requirements 17(d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by Angel Funds in startups 19F(2) Minimum investment by Angel Fund 19F(3) Investment by Angel Fund to be locked in for 1 year 19F(4) Angel funds to not invest in associates 19F(5) Angel funds to not invest more than 25% of the total investments under all its schemes in one venture capital undertaking 19F(6) Conditions for Investment outside India 19G(1) The sponsor to ensure that the angel investor satisfy conditions specified in sub regulation (2) of regulation 19A 19G(2) Continuing interest 19(G)(3) The manager of the angel fund shall obtain an undertaking from every Angel Investor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponsible for every decision of AIF 20(6) Manager shall be responsible for ensuring that every decision of AIF is in compliance with policies and procedures laid down by AIF 20(7) Manager may constitute an Investment Committee (by whatever name called), to approve the decisions of the Alternative Investment Fund and such constitution shall be subject to such conditions as specified by the Board from time to time 20(8) Investment Committee shall be responsible for ensuring that decisions are in compliance with policies procedure laid down in terms of sub regulation 20 (3) of this regulation (Not applicable in case the commitment to invest is not less than Rs.70 crores and has furnished a waiver to the AIF 20(9) Members of Investment Committee shall abide by Code of Conduct applicable to them 20(10) External members of Investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22(c) Any enquiry /legal action as and when occurred 22(d) Any material liability during the tenure of AIF 22(e) Any breach of provisions of Placement Memorandum or Agreement 22(f) Change in control of the Sponsor or Manager or Investee Company 22(g) To provide on annual basis (within 180 days from the year- end) report to investors including following information; A) Financial information of Investee Company B) different Material risk as prescribed in AIF Regulations how they are managed 22(h) Category III AIF to provide quarterly report in respect of regulation 22(g) within 60 days of end of the quarter 22(i) Any signif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Whether Sponsor and Manager of the scheme is same as Sponsor and Manager of AIF 4. Whether adequate disclosures are made in all sections and subsections of the placement memorandum in line with template placement memorandum provided vide SEBI circular dated Feb 5, 2020 5. Whether the scheme seeks waiver from requirement of placement memorandum as per template prescribed in SEBI Circular dated Feb 05, 2020 If yes, confirm whether it is disclosed that each investor shall commit a minimum capital contribution of INR 70 crores and provide a waiver from the requirement of placement memorandum in prescribed template. 6. Whether it is verified that information provided for a particular term is consistent across different sections of the placement memorandum If no, highlight the respective sections/clauses 7. Whether there are any clauses in the placement me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Whether it is verified the key investment team satisfies the experience and professional qualification criteria provided under AIF Regulations Name(s) of qualifying member(s) to be provided 18. Whether the manager has constituted or proposes to constitute an investment committee (by whatever name called) to approve decisions of the scheme If no, also inform whether any committee has been set up to provide non- binding recommendations on investment proposals 19. If the investment committee (as specified in Regulation 20(7) of AIF Regulations) is approving authority, whether: it is stated that the functioning of the investment committee shall be in compliance with applicable provisions of AIF Regulations. the terms of reference of the investment committee are disclosed in the placement memorandum 20. Whether it is disclosed that delegation/outsourcing of any activity of the AIF to a third party will be in compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. Whether it is disclosed that co-investment by investors of AIF shall be made in compliance with applicable provisions of AIF Regulations and PMS Regulations 31. Whether it is disclosed that the manager will establish written down conflict management policy and whether timeline for adopting such policy has been provided 32. Whether the distribution waterfall illustrations have been provided for different scenarios If yes, whether it is verified that the illustrations are accurate and complete 33. Whether necessary disclosure has been made regarding the disciplinary history in terms of SEBI Circulars dated June 19, 2014 and July 18, 2014 Note: (i) If any of the points above is not applicable to the proposed scheme, it may be mentioned as not applicable . (ii) Additional material information, in similar format, may also be provided which is not covered in the above table and any other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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