{"id":3716,"date":"2019-03-01T13:32:30","date_gmt":"2019-03-01T08:02:30","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=3716"},"modified":"2020-10-25T00:09:17","modified_gmt":"2020-10-24T18:39:17","slug":"process-of-alternative-investment-fund-registration-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/","title":{"rendered":"Process of Alternative Investment Fund Registration in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Every investor who is desirous of investing funds in India must understand the concept of the Alternative Investment Fund firstly.&nbsp; The idea of the Alternative Investment Fund (AIF) is becoming quite popular and is advantageous to the public at large. Moreover, Alternative Investment Fund registration helps in providing better returns to the investors. It is regulated under Regulation 2 (1) (b) SEBI (Alternative Investment Funds) Regulation, 2012.<\/p>\n\n\n\n<p>Here, in this blog, we will discuss this newly launched registration fund in detail.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a344d99b5a2e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a344d99b5a2e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Definition_of_Alternative_Fund_Investment\" title=\"Definition of Alternative Fund Investment\">Definition of Alternative Fund Investment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#What_is_Alternative_Investment_Fund_Registration\" title=\"What is Alternative Investment Fund Registration?\">What is Alternative Investment Fund Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Categories_under_which_you_can_seek_Alternative_Investment_Fund_Registration\" title=\"Categories under which you can seek Alternative Investment Fund Registration\">Categories under which you can seek Alternative Investment Fund Registration<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#1_Category_%E2%80%93_I_AIF\" title=\"1. Category &#8211; I AIF\">1. Category &#8211; I AIF<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#2_Category_%E2%80%93_II_AIF\" title=\"2. Category &#8211; II AIF\">2. Category &#8211; II AIF<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#3_Category_%E2%80%93_III_AIF\" title=\"3. Category &#8211; III AIF\">3. Category &#8211; III AIF<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Eligibility_criteria_for_Alternative_Investment_Fund_Registration\" title=\"Eligibility criteria for Alternative Investment Fund Registration\">Eligibility criteria for Alternative Investment Fund Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Documents_required_for_AIF_Registration\" title=\"Documents required for AIF Registration&nbsp;\">Documents required for AIF Registration&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Process_of_Alternative_Investment_Fund_Registration\" title=\"Process of Alternative Investment Fund Registration\">Process of Alternative Investment Fund Registration<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Grant_of_Registration_Certificate\" title=\"Grant of Registration Certificate\">Grant of Registration Certificate<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#AIF_registration_fees\" title=\"AIF registration fees\">AIF registration fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Validity_of_AIF_registration_certificate\" title=\"Validity of AIF registration certificate\">Validity of AIF registration certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Post_Registration_Compliance\" title=\"Post Registration Compliance\">Post Registration Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/process-of-alternative-investment-fund-registration-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definition_of_Alternative_Fund_Investment\"><\/span><strong>Definition of Alternative Fund Investment<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Alternative Investment fund\/AIF is one of the best types of investment funds in India that investors can utilize for investing as well as gaining benefits.<\/p>\n\n\n\n<p>The alternative investment fund is a fund that is invested in asset classes other than stocks, bonds, and cash. It collects funds from the investors and later on invests the funds for the benefit of investors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Alternative_Investment_Fund_Registration\"><\/span><strong>What is Alternative Investment Fund Registration?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Alternative Investment Fund Registration is a permit which enables every investor to avail a number of benefits whether for investing or getting funds. In India, AIF is defined under Regulation 2(1) (b) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.<\/p>\n\n\n\n<p>Alternative Investment Fund is a private fund that doesn\u2019t fall under the jurisdiction of any regulatory agency. It\u2019s a fund that invites investors from India or outside of India to invest funds for the benefit of other investors. <\/p>\n\n\n\n<p>Alternative Investment fund does not include those funds which are covered under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. Alternative Investment fund includes venture capital fund, private equity funds, debt funds, etc.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Categories_under_which_you_can_seek_Alternative_Investment_Fund_Registration\"><\/span><strong>Categories under which you can seek Alternative Investment Fund Registration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An applicant\/entity can seek Alternative Investment Fund registration under the following three categories:<\/p>\n\n\n\n<ol><li><strong> Category &#8211; I <\/strong>AIF<\/li><li><strong>Category &#8211; II<\/strong> AIF<\/li><li><strong> Category &#8211; III<\/strong> AIF<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Category_%E2%80%93_I_AIF\"><\/span><strong>1. Category &#8211; I AIF<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This category deals with AIFs which invest the fund in a start-up or early-stage ventures or social ventures. Venture capital funds, SME fund, social venture funds, infrastructure funds, etc. fall under this category.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Category_%E2%80%93_II_AIF\"><\/span><strong>2. Category &#8211; II<\/strong> <strong>AIF<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Under this category, AIFs are not permitted to undertake to borrow except for day to day operational requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Category_%E2%80%93_III_AIF\"><\/span><strong>3. Category &#8211; III AIF<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Alternative Investment funds, like hedge funds and funds which trade to make short-term returns, fall under this category.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_criteria_for_Alternative_Investment_Fund_Registration\"><\/span><strong>Eligibility criteria for <\/strong><strong>Alternative Investment Fund Registration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following criteria needs to be fulfilled for registration of Alternative Investment Fund:<\/p>\n\n\n\n<ul><li>An applicant or entity is prohibited by its memorandum and articles of association from inviting the public to subscribe to its securities.<\/li><li>A maximum number of investors could be 1000.<\/li><li>If the applicant is a trust, then the applicant has to furnish the trust deed duly registered under provisions of the Registration Act, 1908.<\/li><li>In case, the applicant is a <a rel=\"noopener noreferrer\" href=\"https:\/\/swaritadvisors.com\/limited-liability-partnership\" target=\"_blank\">limited liability partnership<\/a>, then a partnership deed duly filed with the Registrar under the Limited Liability Partnership Act, 2008 has to be furnished.<\/li><li>The investor must be an Indian or NRI.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_required_for_AIF_Registration\"><\/span><strong>Documents required for <\/strong><strong>AIF Registration&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An applicant who is interested to obtain AIF registration must submit all the documents mentioned below:<\/p>\n\n\n\n<p>1) Name and address of the registered office;<\/p>\n\n\n\n<p>2) Company registration certificate, if any;<\/p>\n\n\n\n<p>3) E-mail address of the applicant;<\/p>\n\n\n\n<p>4) Partnership deed, if any;<\/p>\n\n\n\n<p>5) Trust deed, if any;<\/p>\n\n\n\n<p>6) Copy of the draft placement memorandum;<\/p>\n\n\n\n<p>7) Details of the business plan and investment strategy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Process_of_Alternative_Investment_Fund_Registration\"><\/span><strong>Process<\/strong><strong> of Alternative Investment Fund Registration<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To obtain AIF registration, an entity has to follow the below steps:<\/p>\n\n\n\n<p><strong>Step 1<\/strong> &#8211; The Applicant requires to make an application to the Security and Exchange Board of India in Form A as provided in the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. Applicant along with the application needs to attach all the necessary documents and fees.<\/p>\n\n\n\n<p><strong>Step 2<\/strong> &#8211; Upon receipt of the application, within 21 working days, the applicant will receive a reply from the Security and Exchange Board of India\/SEBI.<\/p>\n\n\n\n<p><strong>Step 3<\/strong> &#8211; For checking the eligibility criteria, the applicant should go through the SEBI Regulations.<\/p>\n\n\n\n<p><strong>Step 4<\/strong> &#8211; It is mandatory on part of the applicant to mention in the covering letter that it is registered with SEBI as a Venture capital fund or not. If the applicant is registered as a Venture capital fund, then it needs to provide all the details.<\/p>\n\n\n\n<p>Prior to filing application for registration, if the applicant has already undertaken the activities of AIF, then it has to provide details.<\/p>\n\n\n\n<p>In cover letter applicant has to state that it is applying for registration of a new fund.<\/p>\n\n\n\n<p><strong>Step 5<\/strong> &#8211; As an important part of the registration process, the applicant has to submit Form A duly signed and stamped, application fees by way of the bank draft.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Grant_of_Registration_Certificate\"><\/span><strong>Grant of Registration Certificate<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>Security and Exchange Board of India shall consider the requirements as prescribed in the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 for purpose of grant of registration.<\/li><li>If SEBI is satisfied that the applicant fulfills all the requirements as mentioned in the regulation, then only SEBI will approve the registration application and convey the same to the applicant.<\/li><li>Upon receipt of approval from SEBI, the applicant needs to pay the proper registration fee by way of the bank<\/li><li>After receiving the registration fees, SEBI will grant the certificate of registration.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"AIF_registration_fees\"><\/span><strong>AIF registration fees<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An applicant needs to pay the registration fee as prescribed under SEBI Regulations. The following is the fee structure for AIF registration.<\/p>\n\n\n\n<p>Application fee- Rs.1, 00,000<\/p>\n\n\n\n<ul><li>The registration fee for Category I Alternative Investment Fund is Rs. 5, 00,000.<\/li><li>The registration fee for the Category II Alternative Investment Fund is Rs. 10, 00,000.<\/li><li>The registration fee for Category III Alternative Investment Fund is Rs. 15, 00,000.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Validity_of_AIF_registration_certificate\"><\/span><strong>Validity<\/strong><strong> of AIF registration certificate<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AIF registration certificate is valid until the company is wound up.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post_Registration_Compliance\"><\/span><strong>Post Registration Compliance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After obtaining registration, an applicant has to comply with the following requirements:<\/p>\n\n\n\n<p>1) AIF needs to comply with the reporting requirements as specified by SEBI.<\/p>\n\n\n\n<p>2) AIF has to check the SEBI website for any circulars, guidelines of SEBI.<\/p>\n\n\n\n<p>3) If AIF wants to make changes in the details submitted to SEBI, then AIF must intimate the same to SEBI.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>From the above discussion, we can conclude that the Alternative Fund Investment Registration is mandatory for investors seeking to set up the business of Angel Funding, Venture Capital, etc. <\/p>\n\n\n\n<p>At present, among the investors, AIF registration is in high demand. Due to better returns and all other facilities, AIF attracts Investors to obtain registration. <\/p>\n\n\n\n<p>As we have observed, the registration process of AIF is hassle-free if you fulfill all its eligibility criteria and have all the required documents. Once SEBI has scrutinized the records and is satisfied with every detail, it will grant the applicant with the certificate of registration of AIF. <\/p>\n\n\n\n<p>After receiving the AIF license, the applicant is strictly advised to follow up with the post-compliance to avoid any obstacle arising in business operation in the future.<\/p>\n\n\n\n<p>If you have any doubt relating to AIF, then kindly <a rel=\"noopener noreferrer\" href=\"https:\/\/swaritadvisors.com\/contact-us\" target=\"_blank\">contact us.<\/a><\/p>\n\n\n\n<p><b>Also, Read our Article:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/alternative-investment-funds-indian-scenario\/\"><\/a>Alternative Investment Funds in the Indian Scenario<\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every investor who is desirous of investing funds in India must understand the concept of the Alternative Investment Fund firstly.&nbsp; The idea of the Alternative Investment Fund (AIF) is becoming quite popular and is advantageous to the public at large. Moreover, Alternative Investment Fund registration helps in providing better returns to the investors. It is [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":3723,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[363],"tags":[408,410,409,406,407],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3716"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=3716"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3716\/revisions"}],"predecessor-version":[{"id":14849,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3716\/revisions\/14849"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/3723"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=3716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=3716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=3716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}