SEBI AIF Registration Process: Steps, Documents and Timeline

Registering an Alternative Investment Fund with SEBI is less about one application form and more about assembling entities, documents and people that SEBI will accept as fit to manage other people's money. The form itself, Form A under the SEBI (Alternative Investment Funds) Regulations, 2012, is filed online on the SEBI Intermediary Portal. What takes the time is everything that must exist before you file it.

This note walks through the process in the order it usually happens, lists the documents to expect and explains who signs what. It is general guidance, not legal advice. Counsel drafts the trust deed, the PPM and the agreements; a SEBI-registered merchant banker files the PPM where the rules require it; the sponsor, manager and trustee sign for the fund.

Before you file: the decisions that come first

Three decisions shape every document that follows: the category (I, II or III), the legal vehicle (trust, LLP or company) and the people. Change any of them midway and the drafting starts again, so settle them before counsel begins the trust deed or the PPM.

On people, SEBI looks at three roles. The sponsor sets up the fund and puts in the continuing interest. The manager runs the investments and is the main SEBI-facing entity, so it must pass the fit and proper test and have a key investment team with the experience and qualifications SEBI prescribes, including at least one key member holding the NISM certification SEBI specifies for AIF managers. In a trust, a trustee holds the assets for investors, usually a professional trustee company.

The registration process, step by step

The sequence below is the one that usually works. Some steps run in parallel, but none can be skipped.

Registration is granted to the fund. Each scheme it launches later needs its own PPM filing and, where applicable, a scheme fee.

• Step 1, strategy: fix the category, vehicle, investment strategy, target corpus and investor profile, and test the tax position for resident and foreign investors.
• Step 2, people: set up the sponsor and manager entities, appoint the trustee and a compliance officer, and check the key investment team against SEBI's eligibility tests.
• Step 3, vehicle: execute and register the trust deed, or incorporate the LLP or company; pay stamp duty at your state's rate; open a bank account and obtain a PAN for the fund.
• Step 4, agreements: sign the investment management agreement between the trustee and the manager, and settle the contribution agreement investors will sign.
• Step 5, PPM: prepare the placement memorandum in SEBI's template, which has a standard part and a supplementary part.
• Step 6, filing: submit Form A on the SEBI Intermediary Portal with the application fee, the supporting documents and the first scheme's PPM, routed through a SEBI-registered merchant banker where required.
• Step 7, queries: answer SEBI's observations, pay the registration fee when called for and receive the certificate of registration.
• Step 8, launch: declare the first close within the window SEBI sets after taking the PPM on record, which has been 12 months.

Documents you should expect to prepare

The application asks for information about the fund, the sponsor, the manager, the trustee and the key people behind each, with fit and proper declarations. In practice the pack looks like the list below.

Personal documents for the key investment team can take longer to gather than the legal drafting, so start collecting them early.

• Constitution: the registered trust deed, LLP agreement or memorandum and articles, and the fund's PAN.
• Sponsor and manager: incorporation documents, ownership and control structure, financial statements and board or partner resolutions.
• Key investment team: CVs, proof of qualifications and experience, the NISM certificate and KYC.
• Fund terms: the PPM, the investment management agreement, the contribution agreement and the trustee's consent.
• Declarations: fit and proper declarations, compliance undertakings and disclosure of any regulatory or legal proceedings.

Fees, timeline and what slows things down

SEBI charges an application fee on filing, a registration fee on grant that rises from Category I to Category III, and a scheme fee for later schemes. I am deliberately not quoting amounts, because they change; take them from SEBI's current fee schedule when you file.

End to end, plan on three to six months from a settled structure to the certificate. Drafting is rarely the bottleneck. Time goes on SEBI's observations, gaps in the manager's eligibility, PPM disclosures that do not match the other documents, and stamping and registering the trust deed.

Budget separately for professional costs: counsel, the merchant banker, the trustee's acceptance and annual fees, and the valuer, custodian and registrar you will appoint before launch.

After the certificate: what must be ready before the first close

A certificate of registration does not mean you can take money on day one. Before the first drawdown, the fund needs its operating set-up in place, as listed below.

If any investor is a non-resident, or the sponsor or manager is foreign-owned or controlled, map the FEMA reporting and the downstream investment rules before the first close. Form InVi, filed when an investment vehicle issues units to a person resident outside India, is due within 30 days of the issue.

• Units in demat form, through a depository participant and a registrar and transfer agent.
• A SEBI-registered custodian for the fund's securities.
• KYC and anti-money-laundering processes, including KYC registration agency uploads, and an accreditation check for any investor relying on accredited status.
• Investor grievance handling, including registration on SEBI's SCORES platform.
• A compliance calendar for SEBI reports, valuations, audits and tax filings, owned by the compliance officer.

Who signs, and where a CA fits

The application is signed for the fund by the sponsor, manager and trustee through their authorised signatories, and the PPM filing goes through the merchant banker. Counsel drafts and opines on the legal documents. None of those roles can be handed to an adviser who does not hold them.

A chartered accountant adds the most value on structuring, tax modelling for different investor types, the financials of the sponsor and manager, and the post-registration compliance calendar. On fund documents the division of labour is simple: drafted by counsel, coordinated and commercially reviewed by us.

Frequently asked questions

How long does SEBI AIF registration take?

Plan on three to six months from a settled structure to the certificate. The biggest variables are how complete the first filing is and how quickly SEBI's observations are answered.

Is a merchant banker mandatory for AIF registration?

The PPM is filed with SEBI through a SEBI-registered merchant banker, subject to the exemptions SEBI allows for certain fund types. Check the current position for your category before you budget.

Can the sponsor and the manager be the same entity?

Yes. Many funds use one entity as both sponsor and investment manager, provided it meets the conditions for each role. That entity then brings in the continuing interest.

Can we accept investor money before registration?

No. Conversations to gauge interest are common, but no commitment should be drawn down and no unit issued until the fund is registered and its PPM is taken on record. Take legal advice on how you market before registration.

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