Pooled vehicles must also register as AIFs, says Sebi

Regulator says pooling vehicles shall not be created solely for the purpose of investing in an alternative investment fund

The Securities and Exchange Board of India said on Thursday that pooled investment vehicles which invest in alternative investment funds, will also have to register as an AIF.

"Pooling vehicles shall not be created solely for the purpose of investing in an AIF unless the pooling vehicles are registered with SEBI as AIFs (acting as Fund of AIFs)," said the Sebi circular.

Sebi has also asked for greater disclosures on fees and litigations involving the fund. Changes to the memorandum of such funds are to be intimated to unit holders within seven days.

"All AIFs shall intimate any change to the placement memorandum to all unit holders (including investors who have provided commitment to the AIF) within 7 days of making such change, specifically indicating the changes made. Such changes shall also be intimated to SEBI," it said.

The regulator also allowed Category III AIFs to report their leverage data on the next working day, since parties providing the required data do so at varying times. Hedge funds are registered as Category III AIFs.