The Securities and Exchange Board of India (SEBI) on June 30, 2026, issued a Consultation paper on rationalizing the requirement of obtaining investor consent and the ambit of conflicted transactions requiring investor consent under SEBI (Alternative Investment Funds) Regulations, 2012.
The following has been stated:-
•SEBI has proposed amendments to the Alternative Investment Funds (AIF) Regulations to replace references to "associate" with "related party" across various provisions to align the framework with the Companies Act, 2013, and other SEBI regulations.
•The changes would apply to investment restrictions, disclosure requirements, conflict of interest provisions, investor approvals, and transactions involving managers, sponsors, and affiliated entities.
•Angel Funds and Special Situation Funds would be prohibited from investing in related parties of their managers or sponsors, while AIFs would be required to disclose fees and investments involving related parties.
•The consultation paper also compares related party frameworks under other regulatory regimes, including the Companies Act, SEBI LODR Regulations, Portfolio Managers Regulations, InvITs, REITs, and Mutual Funds, to promote consistency, transparency, and stronger governance across the securities market.
The detailed notification is given in the document below.
