Introduction
To enhance the standardisation of the application process, SEBI, on November 3, 2022, published ‘FAQs for grant of registration as alternative investment fund’[1] (“FAQs”). The FAQs are guidelines for submission of the application for seeking registration as an Alternative Investment Fund (“AIF”). In addition to the information, documents and undertakings mandated under the First Schedule of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), an applicant will now be required to submit information, documents and undertakings, as reproduced in this article. Thus, the application form will now constitute the following, (a) information as specified under the First Schedule of the AIF Regulations; and (b) other information as specified in the FAQs.
Additional information, documents and undertakings as required under the FAQs
- Information to be provided in the prescribed format and on the letterhead of the respective entities
i. Names of the promoters, controlling entities/ persons, directors/ partners, key management persons, key investment team members, compliance officer, associates and group companies of the applicant, sponsor and investment manager (as applicable).
ii. Details of shareholders/ partners of the sponsor and investment manager along with their shareholding/ partnership interest (as applicable). In case the shareholder/ partner is a non-individual, then further details of entities holding 15% (fifteen per cent) or more controlling interest in such shareholder/ partner shall be provided.
iii. Disclosure pertaining to registration of the sponsor, investment manager or their shareholders/ partners with shareholding/ voting rights/ partnership interest of 20% (twenty per cent) or more, with the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory & Development Authority (PFRDA) or any other financial regulator. If applicable, then further disclosure pertaining to any adverse concerns raised by the financial regulator in the last 5 (five) years shall be provided.
iv. Details of associates and group companies of the applicant, sponsor and investment manager. If applicable, then further details pertaining to the registration of such associates and group companies with the RBI, IRDA, PFRDA or any other financial regulator shall be provided.
- Information to be provided in the prescribed format and in an excel sheet
Name and PAN details of the applicant, sponsor, investment manager, trustee and their respective controlling entities/persons, directors/partners, promoters, key management persons, key investment team members, compliance officers, associates and group companies (as applicable).
- Documents
i. In case of a trust structure, self-attested copy of the registered trust deed; in case of a limited liability partnership, self-attested copy of the registered partnership deed along with certificate of incorporation; in case of a company, self-attested copy of the memorandum and articles of association along with certificate of incorporation.
ii. Self-attested KYC documents of the applicant, sponsor, investment manager, trustee and their respective its directors/ partners (as applicable), key investment team members and key management personnel of the AIF/ investment manager.
iii. Self-attested Certificate of Incorporation of the sponsor and investment manager.
iv. Latest Chartered Accountant certified net-worth certificate of the sponsor/ investment manager or their respective promoters/ partners (as applicable) to demonstrate that they have sufficient net worth for maintaining continuing interest in the AIF.
- Undertakings/ Declarations
i. Undertaking by the trustee/ board of directors/ designated partners of the applicant, depending upon the legal structure of the AIF, for registration of the AIF.
ii. Undertaking by the trustee/ board of directors/ designated partners of the applicant, depending upon the legal structure of the AIF, for taking the private placement memorandum on record for all schemes of AIFs (except angel funds and schemes that are large value fund).
iii. Declaration pertaining to any supervisory or regulatory concerns/ actions in the last 5 (five) years with respect to the applicant, sponsor, investment manager, controlling entities of sponsor and investment manager, associates and group companies of the applicant/ sponsor/ investment manager (as applicable). If not applicable, then a declaration to that effect shall be provided.
iv. Declaration pertaining to Press Note 3 compliance, in case the investment in sponsor and/ or investment manager is from any of the countries, which share a land border with India or their beneficial owner is from such a country. If not applicable, then a declaration to that effect shall be provided.
In addition to the above, it should also be noted that SEBI has, through the FAQs, formally prescribed the requirement to pay GST on application and registration fees payable by an AIF.
Conclusion
The information and documents additionally prescribed under the FAQs were initially being asked by SEBI during its assessment of applications, which information/ documents are now required to be provided to SEBI upfront along with the application. The inclusion of additional requirements, as part of the application form, may enable the regulator to verify the details of the applicant and related parties in a consolidated manner, which may ultimately shorten the time period to receive registration as an AIF.
