Dematerialisation of Units of AIF 

PUBLISHED ON: 22-06-2023

SEBI has released the conditions for issuance of units of Alternative Investment Funds (“AIF”) in dematerialised form, vide a circular dated June 21, 2023 (available here):

• Schemes of AIFs are required to dematerialise all the units issued by them, within the following timeline:
  • Schemes with corpus more than or equal to INR 500 Crore: Latest by October 31, 2023; and
  • Schemes with corpus less than INR 500 Crore: Latest by April 30, 2024.

• Schemes of AIFs are required to issue units only in dematerialised form, with effect from the following dates:
  • Schemes with corpus more than or equal to INR 500 Crore: November 1, 2023; and
    Schemes with corpus less than INR 500 Crore: May 1, 2024.
• The terms of transfer of units of AIF held by an investor would continue to be governed by the PPM, agreements executed between the AIF and the investor, and other fund documents.
• Schemes of AIFs whose tenure is ending on or before April 30, 2024 are not required to comply with the aforementioned.