The Securities and Exchange Board of India (SEBI) on May 11, 2206, issued Consultation on ‘Green-Channel: AIF Rollout Upon Document Acknowledgement’ (GARUDA) Mechanism for Processing of Placement Memorandum of Alternative Investment Funds (AIFs) filed with SEBI.
The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing measures to streamline and expedite the launch of schemes by Alternative Investment Funds (AIFs), in view of the rapid growth of the AIF industry and increasing capital inflows. AIFs are categorized into Large Value Funds (LVFs), Accredited Investor (AI) only schemes, and regular schemes, with varying regulatory requirements based on investor sophistication. SEBI has already introduced a fast-track mechanism allowing scheme launches within 30 days of filing, relying more on due diligence by Merchant Bankers and reducing upfront regulatory scrutiny.
Building on this, SEBI has proposed further easing under the “Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA)” mechanism. For regular schemes, it is proposed to reduce the launch timeline to 10 working days after filing the placement memorandum (PPM). For AI-only schemes and Angel Funds, greater flexibility is proposed by allowing direct filing of PPMs with SEBI (without Merchant Bankers), replacing due diligence certificates with undertakings from key officials, and enabling immediate launch of schemes upon registration or filing.
The proposals are based on the increasing role of Accredited Investors, who are considered financially sophisticated and capable of making informed decisions, thereby justifying lighter regulatory oversight. SEBI will continue post-facto scrutiny of scheme documents on a risk-based sample basis, with penalties for any irregularities. Public and stakeholder comments on these proposals have been invited by June 1, 2026.
