SEBI relaxes implementation deadline for disclosure of allocation methodology by Angel Funds

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The Securities and Exchange Board of India (SEBI) has extended the deadline for angel funds to comply with a key disclosure requirement related to investment allocation.

The securities market regulator announced that angel funds now have until 31 January 2026, to specify their allocation methodology in their Private Placement Memorandum (PPM).

SEBI said the extension follows representations from the alternative investment fund (AIF) industry, which sought more time to meet the requirement. The move is aimed at providing ease of compliance for existing market participants.

After the new deadline, angel funds must ensure that all investment allocations strictly adhere to the methodology disclosed in their PPMs.

The requirement forms part of SEBIs broader push to enhance transparency, fairness, and uniformity in the functioning of AIFs, especially those engaged in early-stage investments.

Under this framework, angel funds must clearly define how investments will be allocated among participating investors to ensure a systematic and equitable distribution of opportunities.

In September 2024, SEBI introduced significant revisions to the regulatory framework for angel funds under the AIF norms, aimed at simplifying fundraising, investment, and compliance processes.

A key change requires angel funds to raise capital exclusively from accredited investors, thereby enhancing investor protection and accountability.

By extending the compliance deadline, SEBI has offered welcome relief to the angel investing ecosystem, giving funds additional time to strengthen their allocation frameworks and ensure closer alignment with the regulators transparency goals.

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