Definitions

2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below, and their cognate expressions and variations shall be construed accordingly,—

(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992); [(aa) “accreditation agency” means a subsidiary of a recognized stock exchange or a subsidiary of a depository or any other entity as may be specified by the Board from time to time.

Explanation: For the purpose of this clause, the Board may recognize an accreditation agency subject to such conditions as may be specified;

(ab) “accredited investor” means any person who is granted a certificate of accreditation by an accreditation agency who,

(i) in case of an individual, Hindu Undivided Family, family trust or sole proprietorship has: (A) annual income of at least two crore rupees; or (B) net worth of at least seven crore fifty lakh rupees, out of which not less than three crores seventy-five lakh rupees is in the form of financial assets; or (C) annual income of at least one crore rupees and minimum net worth of five crore rupees, out of which not less than two crore fifty lakh rupees is in the form of financial assets.

(ii) in case of a body corporate, has net worth of at least fifty crore rupees;

(iii) in case of a trust other than family trust, has net worth of at least fifty crore rupees;

(iv) in case of a partnership firm set up under the Indian Partnership Act, 1932, each partner independently meets the eligibility criteria for accreditation:

Provided that the Central Government and the State Governments, developmental agencies set up under the aegis of the Central Government or the State Governments, funds set up by the Central Government or the State Governments, qualified institutional buyers as defined under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, Category I foreign portfolio investors, sovereign wealth funds and multilateral agencies and any other entity as may be specified by the Board from time to time, shall deemed to be an accredited investor and may not be required to obtain a certificate of accreditation;] [(ac) “Accredited Investors only fund” means an Alternative Investment Fund or scheme of the Alternative Investment Fund in which each investor other than the Manager, Sponsor, employees or directors of the Alternative Investment Fund or employees or directors of the Manager, is an Accredited Investor:

Provided that an Alternative Investment Fund or a scheme of an Alternative Investment Fund, launched prior to the notification of Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, may be permitted to convert to Accredited Investors only fund, subject to the conditions as may be specified by the Board.

Explanation - ‘Accredited Investors only fund’ shall include ‘large value fund for accredited investors’.]

(b) “Alternative Investment Fund” means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which,(i) is a privately pooled investment vehicle which collects funds from investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors; and

(ii) is not covered under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities:

Provided that the following shall not be considered as Alternative Investment Fund for the purpose of these regulations,-

(i)

(ii) family trusts set up for the benefit of ‘relatives’ as defined under [Companies Act, 2013]; [ESOP Trusts set up under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 or as permitted under Companies Act, 2013;]

(iii) employee welfare trusts or gratuity trusts set up for the benefit of employees;

(iv) [’holding companies’ as defined under sub-section 46 of section 2 of Companies Act, 2013;]

(v) other special purpose vehicles not established by fund managers, including securitization trusts, regulated under a specific regulatory framework;

(vi) funds managed by securitisation company or reconstruction company which is registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and

(vii) any such pool of funds which is directly regulated by any other regulator in India;

(c) “associate” means a company or a limited liability partnership or a body corporate in which a director or trustee or partner or Sponsor or Manager of the Alternative Investment Fund or a director or partner of the Manager or Sponsor holds, either individually or collectively, more than fifteen percent of its paid-up equity share capital or partnership interest, as the case may be;

(d) “Board” means the Securities and Exchange Board of India established under Section 3 of the Act;

(e) “certificate” means a certificate of registration granted by the Board under regulation 6; [(f) “Change in control” –

(i) in case of a body corporate – (A) if its shares are listed on any recognised stock exchange, shall be construed with reference to the definition of control in terms of regulations framed under clause (h) of sub-section (2) of section 11 of the Act; (B) if its shares are not listed on any recognised stock exchange, shall be construed with reference to the definition of control as provided in sub-section (27) of Section 2 of the Companies Act, 2013 (18 of 2013);

(ii) in a case other than that of a body corporate, shall be construed as any change in its legal formation or ownership or change in controlling interest.

Explanation – For the purpose of sub-clause (ii), the expression “controlling interest” means an interest, direct or indirect, to the extent of not less than fifty percent of voting rights or interest;] [(fa) “Co-investment” means investment made by a Manager or Sponsor or investor of a Category I or II Alternative Investment Fund in unlisted securities of investee companies where such a Category I or Category II Alternative Investment Fund makes investment;] [(fb) “Co-investment scheme” means a scheme of a Category I or Category II Alternative Investment Fund, which facilitates co-investment to investors of a particular scheme of an Alternative Investment Fund, in unlisted securities of an investee company where the scheme of the Alternative Investment Fund is making investment or has invested;]

(g) “company” means a company incorporated under the[Companies Act, 2013]; [(ga) “Corporate Debt Market Development Fund” means an Alternative Investment Fund set up and making investments in terms of Chapter III-C of these regulations.]

(h) “corpus” means the total amount of funds committed by investors to the Alternative Investment Fund by way of a written contract or any such document as on a particular date; [(ha) “credit default swaps” shall have the same meaning as assigned to it in the Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022.] [ [(hb)] “custodian” means a person who has been granted a certificate of registration 12 13 to carry on the business of custodian under the Securities and Exchange Board of India (Custodian) Regulations, 1996;] “(fa) “Co-investment” means investment made by a Manager or Sponsor or investor of Category I and II Alternative Investment Fund(s) in investee companies where such Category I or Category II Alternative Investment Fund(s) make investment:

Provided that Co-investment by investors of Alternative Investment Fundshall be through a Co-investment Portfolio Manager as specified under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020.” [(i) “debt fund” means an Alternative Investment Fund which invests primarily in debt securities of listed or unlisted investee companies or in securitized debt instruments as per the stated objectives of the Fund;] [(ia) “dissolution period” means the period following the expiry of the liquidation period of the scheme for the purpose of liquidating the unliquidated investments of the scheme of the Alternative Investment Fund.

(ib) “encumbrance” shall have the same meaning as assigned to it under chapter V of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.]

(j) “equity linked instruments” includes instruments convertible into equity shares or share warrants, preference shares, debentures compulsorily or optionally convertible into equity;

(k) “form” means any of the forms set out in the First Schedule; [(ka) “goods” means the goods notified by the Central Government under clause (bc) of section 2 of the Securities Contracts (Regulation) Act, 1956 and forming the underlying of any commodity derivative;]

(l) “hedge fund” means an Alternative Investment Fund which employs diverse or complex trading strategies and invests and trades in securities having diverse risks or complex products including listed and unlisted derivatives;

(m) “infrastructure fund” means an Alternative Investment Fund which invests primarily in unlisted securities or partnership interest or listed debt or securitized debt instruments of investee companies or special purpose vehicles engaged in or formed for the purpose of operating, developing or holding infrastructure projects;

Explanation.─ ‘Infrastructure’ shall be as defined by the government of India from time to time.

(n) “inspecting authority” means any one or more person appointed by the Board to exercise powers conferred under regulation 30;

(o) “investee company” means any company, special purpose vehicle or limited liability partnership or body corporate[or real estate investment trust or infrastructure investment trust] in which an Alternative Investment Fund makes an investment; [(p) “investable funds” means corpus of the scheme of Alternative Investment Fund net of expenditure for administration and management of the fund estimated for the tenure of the fund.

Explanation.─ For the purpose of this clause, the expression “tenure” means the duration of scheme from the[date of first close] till[last date] of the term as specified in the fund documents;] [(pa) “large value fund for accredited investors” means an Alternative Investment Fund or scheme of an Alternative Investment Fund in which each investor (other than the Manager, Sponsor, employees or directors of the Alternative Investment Fund or employees or directors of the Manager) is an accredited investor and invests not less than[twenty-five] crore rupees;] [Provided that an Alternative Investment Fund or a scheme of an Alternative Investment Fund, launched prior to the notification of the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2025, may be permitted to convert to a large value fund for accredited investors, subject to the conditions as may be specified by the Board.] [(pb) “liquidation period” means a period of one year following the expiry of tenure or extended tenure of the scheme[***] of an Alternative Investment Fund;

(pc) “liquidation scheme” means a close ended scheme launched by an Alternative Investment Fund only for the purpose of liquidating the unliquidated investments purchased from its scheme, whose tenure has expired.]

(q) “manager” means any person or entity who is appointed by the Alternative Investment Fund to manage its investments by whatever name called and may also be same as the sponsor of the Fund; [(qa) “not for profit organization” shall have the same meaning as assigned to it in clause (e) of regulation 292A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;]

(r) “private equity fund” means an Alternative Investment Fund which invests primarily in equity or equity linked instruments or partnership interests of investee companies according to the stated objective of the fund; [(ra) “Shelf placement memorandum” means a placement memorandum filed by an Alternative Investment Fund for launching co-investment schemes;]

(s) “SME” means Small and Medium Enterprise and shall have the same meaning as assigned to it under the Micro, Small and Medium Enterprises Development Act 2006 as amended from time to time;

(t) “SME fund” means an Alternative Investment Fund which invests primarily in unlisted securities of investee companies which are SMEs or securities of those SMEs which are listed or proposed to be listed on a SME exchange or SME segment of an exchange; [(ta) “social enterprise” shall have the same meaning as assigned to it in clause (h) of regulation 292A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; “social impact fund” means an Alternative Investment Fund which invests (tb) primarily in securities, units or partnership interest of social ventures or securities of social enterprises and which satisfies the social performance norms laid down by the fund;

(tc) “social stock exchange” shall have the same meaning as assigned to it in clause (i) of regulation 292A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

(td) “social units” means units issued by a social impact fund or schemes of a social impact fund to investors who have agreed to receive only social returns or benefits and no financial returns against their contribution;]

(u) “social venture” means a trust, society or company or venture capital undertaking or limited liability partnership formed with the purpose of promoting social welfare or solving social problems or providing social benefits and includes,(i) public charitable trusts registered with Charity Commissioner;

(ii) societies registered for charitable purposes or for promotion of science, literature, or fine arts;

(iii) [company registered under section 8 of the Companies Act, 2013;]

(iv) micro finance institutions;

(v)

(w) “sponsor” means any person or persons who set up the Alternative Investment [***] Fund and includes promoter in case of a company and designated partner in case of a limited liability partnership; [(wa) “startup” means a private limited company or a limited liability partnership which fulfills the criteria for startup as specified by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, vide notification no. G.S.R. 127(E) dated February 19, 2019 or such other policy of the Central Government issued in this regard from time to time;]

(x) “trust” means a trust established under the Indian Trusts Act, 1882 or under an Act of Parliament or State Legislation; [(y) “unit” means beneficial interest of the investors in the Alternative Investment Fund or a scheme of the Alternative Investment Fund and may be fully or partly paid up.

Explanation.─ For the purpose of this clause, partly paid up units shall represent the portion of committed capital invested by the investor in Alternative Investment Fund or scheme of the Alternative Investment Fund;]

(z) “venture capital fund” means an Alternative Investment Fund which invests primarily in unlisted securities of start-ups, emerging or early-stage venture capital undertakings mainly involved in new products, new services, technology or intellectual property right based activities or a new business model[and shall include[a][ migrated venture capital fund as defined under Chapter III-D]]; [ [(za)] “venture capital undertaking” means a domestic company which is not listed on 36 37 a recognised stock exchange at the time of making investments;]

(2) All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Act or the Securities Contracts (Regulation) Act, 1956, (42 of 1956) or the[Companies Act, 2013 (18 of 2013)], or any statutory modification or re-enactment thereto, as the case may be. REGISTRATION OF ALTERNATIVE INVESTMENT FUNDS