The Securities and Exchange Board of India (SEBI) on December 08, 2025, issued the notification regarding the Modalities for migration to AI only schemes and relaxations to Large Value Funds for Accredited Investors under SEBI (Alternative Investment Funds) Regulations, 2012.
The following has been stated namely: -
• SEBI has created a separate category of Accredited-Investor–only (AI-only) schemes, providing reduced compliance requirements and additional operational flexibility; similar relaxations are also extended to Large Value Funds (LVFs).
• Any new scheme launched as an AI-only scheme or LVF must include “AI only fund” or “LVF” in its name (e.g., “Xyz AI only fund”, “Abc LVF”).
• Existing AIFs/schemes may convert to AI-only or LVF schemes with 100% investor consent, after which manager’s mustjavascript:__doPostBack('ctl00$BodyContent$btnAddEvent','')
o Rename the scheme accordingly,
o Report the conversion to SEBI within 15 days, and
o Notify depositories for system updates within 15 days.
• An investor who qualifies as an Accredited Investor at onboarding will remain treated as AI throughout the scheme’s life, even if status changes later.
• AI-only schemes may have a maximum extension of 5 years (including any extension prior to conversion).
• LVFs are exempt from the standard placement memorandum template and annual audit of the placement memorandum without needing investor waivers.
• Compliance with this circular must be included in the AIF’s Compliance Test Report.
This shall come into force on December 08, 2025.
[Notification No. HO/19/34/11(5)2025-AFD-POD1/I/188/2025]
