SEBI Proposes GARUDA Mechanism for AIFs

¨     Securities and Exchange Board of India proposed GARUDA on 11 May 2026.

¨GARUDA stands for Green-Channel: AIF Rollout Upon Document Acknowledgement.

¨ The mechanism is linked with the filing and acknowledgement of Placement Memorandums for AIF schemes.

Alternative Investment Funds in India

¨   Alternative Investment Funds are privately pooled investment vehicles regulated by SEBI.

¨     They operate under the SEBI (Alternative Investment Funds) Regulations, 2012.

¨     AIFs in India are classified into Category I, Category II and Category III.

¨     These funds include venture capital funds, private equity funds, hedge funds and angel funds.

Proposed Green-Channel Process

¨     SEBI proposed reducing the launch time for regular AIF schemes from 30 days to 10 working days.

¨     The timeline will apply after filing the Placement Memorandum through a merchant banker.

¨     The faster launch will be allowed if SEBI raises no objections.

¨     For the first scheme of an AIF, launch will be permitted from the date of registration or after 10 working days of filing the application, whichever is later.

Accredited Investor-only Schemes and Angel Funds

¨  SEBI proposed direct filing of Placement Memorandums for Accredited Investor-only schemes and Angel Funds.

¨     These filings will not require routing through a merchant banker.

¨  Such schemes will be allowed to launch immediately after filing the Placement Memorandum.

¨ The merchant banker due diligence certificate will be replaced by undertakings from the Chief Executive Officer and Compliance Officer of the AIF manager.