SEBI cuts AIF scheme launch wait to 10 days in 2026

What SEBI’s board cleared

The Securities and Exchange Board of India (SEBI) has approved a new “green channel” mechanism to speed up the launch of Alternative Investment Fund (AIF) schemes. The move is aimed at reducing regulatory timelines for scheme rollouts and shifting scheme processing towards an acknowledgement-based approach for placement memorandums.

The approved framework is being referred to as GARUDA, short for Green-Channel: AIF Rollout Upon Document Acknowledgement. A core change is the cut in the waiting period for launching regular AIF schemes. The timeline moves from 30 days to 10 working days after the filing of the Placement Memorandum (PPM), unless SEBI advises otherwise.

The decisions were taken at SEBI’s board meeting, and were also reported alongside other market reforms cleared by the regulator.

How the 10-working-day window will work for regular schemes

Under the revised approach approved by the regulator, regular AIF schemes can be launched 10 working days after filing the PPM with SEBI through a merchant banker. The earlier framework involved a 30-day waiting period.

The change is designed to allow fund managers to move faster from documentation to fundraising, without waiting for a longer pre-launch period. The mechanism remains conditional because SEBI retains the ability to advise otherwise within the 10-working-day window.

Operationally, the filing route for regular schemes continues to run through a merchant banker. This keeps the familiar filing structure intact for most AIF schemes, while tightening timelines for when a scheme can go to market.

Special rule for the first scheme of a newly registered AIF

SEBI has also specified a separate condition for the first scheme launched by a newly registered AIF.

For the first scheme, the scheme may be launched from the date of grant of registration or after 10 working days from filing the PPM, whichever is later. In practice, this means the first scheme cannot be launched purely on the basis of PPM filing if the registration itself is granted later.

This clause is meant to align scheme launch permissions with the AIF’s registration status, while still allowing a tighter, predictable timeline after the PPM is filed.

A separate path for Accredited Investor-only schemes and Angel Funds

In addition to the faster pathway for regular schemes, SEBI has approved a separate framework for Accredited Investor (AI)-only schemes and Angel Funds. The regulator indicated that these categories already operate under a lighter regulatory approach, and the new framework reflects that.

A major change for these schemes is the filing channel. Managers of AI-only schemes and Angel Funds will be allowed to file the PPM directly with SEBI, rather than routing filings through a merchant banker.

This is positioned as a simplification for vehicles that are already subject to a different risk framework, especially because they cater to accredited investors or fit into the Angel Fund category.

What changes in compliance documents under GARUDA

For AI-only schemes and Angel Funds, the shift away from merchant banker routing is paired with a different compliance approach.

Instead of a merchant banker’s due diligence certificate, the AIF manager will submit undertakings from the Chief Executive Officer (CEO), the Compliance Officer, and other designated officials. These undertakings will confirm that the placement memorandum complies with the AIF Regulations and other applicable laws.

Once SEBI acknowledges receipt of the documents under GARUDA, eligible schemes would be allowed to roll out without undergoing the existing pre-launch waiting period. This effectively makes the timeline acknowledgement-led for these categories, with the launch permission tied to receipt acknowledgement.

SEBI says speed will not dilute oversight

SEBI has stated that the relaxation is not intended to weaken regulatory supervision.

Placement memorandums will continue to be examined through risk-based post-facto scrutiny. This means the regulator can review scheme documents after launch, prioritising scrutiny based on risk.

SEBI also retains the power to initiate enforcement action in cases of misstatements, deficiencies, or violations of the AIF Regulations. The message from the regulator is that speed on the front-end is being balanced with accountability through post-facto checks and enforcement powers.

Why the change matters for fundraising timelines

For AIF managers, the most direct impact is on how quickly a scheme can move from filing to fundraising. Cutting the pre-launch wait for regular schemes from 30 days to 10 working days can compress fundraising schedules and improve the speed of capital deployment.

For AI-only schemes and Angel Funds, the ability to proceed without the existing pre-launch waiting period after SEBI acknowledgement could reduce friction in getting a scheme operational. The shift also removes the requirement to route the PPM through a merchant banker for these eligible categories, replacing it with internal undertakings from senior and compliance leadership.

From an investor’s standpoint, the changes are process-oriented rather than product-oriented. The reforms focus on shortening administrative timelines and clarifying launch conditions, rather than changing eligibility, risk, or return characteristics of AIF strategies.

Other proposals cleared at the same board meeting

The board meeting that approved GARUDA also cleared other proposals, as reported by PTI and other reports referenced in the provided text.

These included the reintroduction of open market share buybacks through stock exchanges, relaxation of intra-day borrowing norms for mutual funds, a simplified process for transmission of securities after an investor’s death, and measures aimed at reviving trading activity in agricultural commodity derivatives. Another report in the provided text also mentioned aligning norms for securitised debt instruments with the securitisation framework of the Reserve Bank of India (RBI).

Key changes at a glance

Conclusion

SEBI’s approval of the GARUDA green channel marks a process shift for AIF scheme rollouts, with the waiting period for regular schemes reduced to 10 working days from 30 days. For AI-only schemes and Angel Funds, the regulator has approved direct PPM filing with SEBI and a launch pathway tied to document acknowledgement, backed by internal undertakings.

SEBI has also underlined that faster launches will continue to be paired with risk-based post-facto scrutiny and enforcement action for misstatements or regulatory violations, keeping oversight tools in place as timelines shorten.