GARUDA Mechanism for Processing AIF Placement Memorandums, July 30, 2026

SEBI has introduced the “Green-Channel: AIF Rollout Upon Document Acknowledgement” (“GARUDA”) mechanism for processing Placement Memorandums (“PPMs”) filed by Alternative Investment Funds (“AIFs”). The mechanism follows amendments to the SEBI (Alternative Investment Funds) Regulations, 2012 notified on July 14, 2026, and introduces differentiated procedures for Regular Schemes, Accredited Investor Only Funds (“AI-only Funds”), Large Value Funds for Accredited Investors (“LVFs”) and Angel Funds.⁷

Launch Process for Regular Schemes

For Regular Schemes, an AIF may generally launch a scheme 10 working days after filing the PPM with SEBI, unless otherwise advised. However, the first scheme may be launched only from the later of the date of SEBI registration or expiry of the 10-working-day period.

The filing is required to be accompanied by the following:

• The prescribed fee
• Merchant Banker due-diligence certificate
• Applicable declarations and disclosures

Merchant Banker Due Diligence Requirements

The Merchant Banker is required to undertake due diligence of the PPM. The Merchant Banker is subject to the following restrictions and responsibilities:

• The Merchant Banker cannot be an associate of the AIF, its Sponsor, Manager or Trustee.
• The AIF Manager and Merchant Banker bear specified responsibilities regarding the accuracy and completeness of the disclosures.

AI-Only Funds, LVFs and Angel Funds

For AI-only Funds and LVFs, the Merchant Banker filing and incorporation of SEBI comments are not applicable in the manner prescribed for Regular Schemes. These funds may launch in accordance with the revised filing framework, subject to the applicable registration and filing requirements.

Angel Funds are similarly subject to a differentiated filing mechanism and may circulate their PPM following registration, subject to the prescribed requirements.

Additional Provisions Under the Revised Framework

The revised framework also provides for specified undertakings by the Manager’s CEO/equivalent and Compliance Officer. In addition, it permits the following fund types to make certain PPM changes directly with SEBI along with the prescribed undertaking:

• AI-only Funds
• LVFs
• Angel Funds

Key Takeaway

GARUDA shifts the AIF scheme-launch process towards a more document-acknowledgement and responsibility-based framework, while placing greater emphasis on the accuracy and completeness of PPM disclosures by AIF Managers and, where applicable, Merchant Bankers.

Last Updated on 21 August, 2026