Chapter IV · General Obligations, Responsibilities and Transparency
Regulation 23
Valuation
Chapter IV · General Obligations, Responsibilities and Transparency
SEBI (Alternative Investment Funds) Regulations, 2012
In plain English
In plain English
The AIF must value its investments in the manner SEBI specifies and tell investors how it values them. Under the text of this regulation, Category I and II AIFs have their investments valued by an independent valuer at least once every six months, which can be extended to one year with the approval of at least seventy-five per cent of investors by value. A Category III AIF must keep its NAV calculation independent of the fund management function.
What the Master Circular adds
From SEBI's Master Circular for AIFs (updated 16 June 2026). The Regulation sets the rule; the Master Circular sets how it works in practice.
- MC Ch 18
Securities for which the Mutual Funds Regulations prescribe valuation norms are valued under those norms. Everything else is valued under guidelines endorsed by an AIF industry association representing at least 33% of registered AIFs; the IPEV Guidelines have been endorsed.
Where this sits
Regulation 23 is in Chapter IV — General Obligations, Responsibilities and Transparency of the SEBI (Alternative Investment Funds) Regulations, 2012.
Provisos, explanations and conditions
Quoted from the regulation text. These qualify or carve out exceptions to the main rule.
Provided that such period may be enhanced to one year on approval of atleast seventyfive percent of the investors by value of their investment in the Alternative Investment Fund.
Provided that in case the established policies and procedures of valuation do not result in fair and appropriate valuation, the Manager shall deviate from the established policies and procedures in order to value the assets or securities at a fair value and document the rationale for such deviation:
Provided further that such deviation and its rationale shall be reported to the trustee or the trustee company or the Board of Directors or designated partners of the Alternative Investment Fund and investors of the Alternative Investment Fund.]
What changed
No change to this regulation by the 2026 amendments (No. 303 of 16 April 2026 and No. 313 of 10 July 2026).
Words in square brackets in the official text mark earlier amendments made before 2026. Their earlier wording is not shown because it has not been verified here.
Where it connects
The text of this regulation does not refer to other numbered regulations.
Related Master Circular chapters (by subject)
Chapter
Check yourself
9 practice questions on Regulation 23, each with an explanation for every option.
- Under Regulation 23(2), how can the six-monthly valuation of a Category II AIF be extended to one year?
- What does Regulation 23(3) require of a Category III AIF?
- Under the Master Circular, unlisted securities of an AIF are valued using:
- What must every AIF give its investors about valuation?
- A close-ended Category III AIF last disclosed its NAV on 31 March. By when must the next disclosure be made at the latest?
The regulation
23. (1) The Alternative Investment Fund shall[carry out valuation of its investments in the manner specified by the Board from time to time and] provide to its investors, a description of its valuation procedure and of the methodology for valuing assets.
(2) Category I and Category II Alternative Investment Funds shall undertake valuation of their investments, atleast once in every six months, by an independent valuer appointed by the Alternative Investment Fund:
Provided that such period may be enhanced to one year on approval of atleast seventyfive percent of the investors by value of their investment in the Alternative Investment Fund.
(3) Category III Alternative Investment Funds shall ensure that calculation of the net asset value (NAV) is independent from the fund management function of the Alternative Investment Fund and such NAV shall be disclosed to the investors at intervals not longer than a quarter for close ended Funds and at intervals not longer than a month for open ended funds: [Provided that for the purpose of calculation of NAV, Category III Alternative Investment Funds shall undertake valuation of their investment in unlisted securities and listed debt securities by an independent valuer.
(4) The Manager shall ensure that the Alternative Investment Fund appoints an independent valuer who satisfies the criteria specified by the Board from time to time.
(5) The Manager and the key management personnel of the Manager shall ensure that the independent valuer computes and carries out valuation of the investments of the scheme of the Alternative Investment Fund in the manner specified by the Board from time to time.
(6) The Manager shall be responsible for true and fair valuation of the investments of the scheme of the Alternative Investment Fund:
Provided that in case the established policies and procedures of valuation do not result in fair and appropriate valuation, the Manager shall deviate from the established policies and procedures in order to value the assets or securities at a fair value and document the rationale for such deviation:
Provided further that such deviation and its rationale shall be reported to the trustee or the trustee company or the Board of Directors or designated partners of the Alternative Investment Fund and investors of the Alternative Investment Fund.]
Text from the consolidated Regulations. Square brackets and [***] mark earlier amendments and omissions, as in the official text. Check the official Gazette text before relying on it.
Last checked against source on 10 October 2026: consolidated Regulations to 19 November 2025, read with Amendment Regulations No. 303 (16 April 2026) and No. 313 (10 July 2026).
Source and verification
- Instrument
- SEBI (Alternative Investment Funds) Regulations, 2012 — Regulation 23
- Text used
- Consolidated Regulations as amended up to 19 November 2025, read with the 2026 amendments (no change to this regulation)
- Last checked
- 10 October 2026
- Official source
- www.sebi.gov.in → Legal → Regulations. The Gazette text prevails.
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