Sebi proposes regular updates of NAVs by AIFs in depository systems

To promote transparency in the Alternative Investment Fund (AIF) ecosystem, Sebi on Friday proposed that AIFs should regularly update the net asset value (NAVs) of their units in the depository system.

In its draft circular, Sebi has "proposed to leverage upon the depository infrastructure such that AIFs may be required to maintain updated NAV of the units issued to investors based on valuation of their investments in the depository system".

Further, Sebi proposed that AIFs or their Registrar and Transfer Agent (RTA) should upload the NAV of ISINs of all AIF units in the depository system, within 15 days of valuation of the investment portfolio.

 

The valuation date will be taken as the date of the valuation report if done by an external valuer, and as the date it is recorded in the fund's internal records if done by an internal valuer.

For existing schemes of AIFs, Sebi said that AIFs or their RTAs should upload the latest NAV of ISINs pertaining to all AIF units in the depository system within 45 days of the issuance of the circular.

The Securities and Exchange Board of India (Sebi) has sought public comments till October 9 on the proposals.

Under the rules, AIFs may raise funds from any investor, whether Indian, foreign, or non-resident Indian, by way of the issue of units. The value of such units is calculated based on the valuation of the investment portfolio of the AIF or the scheme of AIF.