Relaxation in Filing of Changes in PPM Through Merchant Banker

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Subject: Detailed Note on SEBI Circular Dated April 29, 2024 – Relaxation in Filing of Changes in PPM Through Merchant Banker

Dear All,

As you are aware, the Financial Year 2024–25 has concluded. In accordance with the SEBI (Alternative Investment Funds) Regulations, 2012, Alternative Investment Funds (AIFs) are required to file changes in the Private Placement Memorandum (PPM) with SEBI.

As per paragraph 2.5.3 of the SEBI Master Circular (SEBI/HO/AFD/PoD1/P/CIR/2023/130) dated July 31, 2023, any change in the terms of the PPM must be intimated to SEBI through a Merchant Banker, along with a due diligence certificate in the prescribed format.

However, SEBI has now issued a new circular (SEBI/HO/AFD/PoD/CIR/2024/028) dated April 29, 2024, to ease compliance and reduce the regulatory burden on AIFs. This circular brings the following relaxations, effective immediately:

Key Highlights of the SEBI Circular:

  1. Direct Filing Allowed for Certain Changes: SEBI has identified specific types of changes in the PPM that do not require submission through a Merchant Banker. These changes can be filed directly with SEBI.

  2. Exemption for Large Value Funds (LVFs): All changes to the PPM by Large Value Funds for Accredited Investors are now exempt from the requirement of Merchant Banker involvement. LVFs may file changes directly with SEBI, along with a duly signed undertaking by the CEO and Compliance Officer of the AIF Manager, as per the format specified in Annexure B of the circular.

Annexure A – List of Changes Not Requiring Filing Through Merchant Banker

Table 1: Changes to PPM Sections Not Requiring Merchant Banker Filing

The following sections of the PPM can be modified without involving a Merchant Banker:

  1. Write-up on Market Opportunity / Indian Economy / Industry Outlook

  2. Track Record of the Investment Manager

  3. Risk Factors

  4. Legal, Regulatory, and Tax Considerations

Table 2: Specific Changes Not Requiring Merchant Banker Filing

The following specific changes can be made and filed directly with SEBI:

  1. Change in contact details (address, phone number, etc.) of AIF, sponsor, manager, trustee, or custodian (except where regulatory approval is required or where contact details pertain to a foreign jurisdiction).

  2. Change of auditor, registrar and transfer agent (RTA), legal advisor, or tax advisor.

  3. Change in size of the fund/scheme.

  4. Change in information related to affiliates.

  5. Change in commitment period.

  6. Change in the Key Investment Team of the manager (as long as at least one key person meets Regulation 4(g) criteria under AIF Regulations).

  7. Change in Key Management Personnel of the AIF or Manager (except if due to change in control of sponsor or manager).

  8. Change in advisory board / investment committee / any other committee (unless such committees have decision-approval authority).

  9. Reduction in fees or expenses charged to the fund or investors (including management fees).

  10. Inclusion or modification of disclosures mandated by regulation (e.g., investor charter, investor complaint data).

  11. Routine factual updates such as changes in designation or qualifications of key personnel, compliance officer, operating partners, etc.

Annexure B – Required Undertaking for LVFs

For LVFs, a simple self-certification by the CEO and Compliance Officer is sufficient when filing changes. The certification must confirm:

  • Due diligence has been conducted on the changes.

  • All changes are based on the latest available information.

  • Compliance with SEBI AIF Regulations and circulars has been ensured.

  • Disclosures are true, fair, adequate, and legally compliant.

Implications for AIF Managers:

  • Managers should review all PPM changes made during FY 2024–25.

  • For changes covered under Annexure A, filings can be made directly with SEBI without a Merchant Banker or Due Diligence Certificate.

  • For LVFs, no involvement of a Merchant Banker is needed for any PPM change, provided the undertaking in Annexure B is submitted.

  • This relaxation reduces the cost and time associated with regulatory compliance.

Action Required:

  • Review changes made to your fund’s PPM in FY 2024–25.

  • Categorize them as per Annexure A.

  • For eligible changes, prepare and file documents directly with SEBI.

  • For LVFs, ensure the prescribed undertaking (Annexure B) is duly signed and submitted.

Please refer to the SEBI Circular Dated April 29, 2024 for full details.

Should you need any assistance or clarification regarding the interpretation or applicability of this circular, feel free to get in touch with us.


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