As the financial year 2025–26 draws to a close, Alternative Investment Funds (AIFs) are approaching the annual deadline of 30 April 2026 for reporting changes made during the year to the Private Placement Memorandum (PPM) and related fund or scheme documents. This is a defined requirement under SEBI’s AIF framework.

A key development shaping this exercise is SEBI’s circular dated 29 April 2024, which introduced a principle-based distinction between changes that must continue to be routed through a Merchant Banker and those that may be filed directly with SEBI. That shift matters because the filing exercise is no longer only about compiling changes. It is also about classifying them correctly and following the right route.

The Reporting Obligation

Under para 2.5.2 of SEBI’s Master Circular for Alternative Investment Funds dated 7 May 2024, AIFs must consolidate all changes made to the PPM during the financial year, intimate investors and SEBI and do so within one month from the end of the financial year. For FY 2025–26, that takes the deadline to 30 April 2026. The requirement covers changes in the terms of the PPM as well as associated fund or scheme documents.

Fund managers should ensure that all relevant revisions made during the year are identified and prepared for reporting within the prescribed timeline. The filing should accurately reflect the revisions made to fund documents during the year.

What Changed Under SEBI’s April 2024 Circular

Before 29 April 2024, intimation to SEBI for changes in the terms of the PPM had to be submitted through a Merchant Banker along with a due diligence certificate. Following feedback from stakeholders, SEBI reviewed that requirement and introduced a revised framework. The revised framework allows certain routine and operational updates to be filed directly, while material changes continue to require Merchant Banker involvement.

Fund managers should, therefore, classify PPM changes into two categories.  Some changes may be filed directly with SEBI. Others continue to require the involvement of a Merchant Banker. This distinction determines the applicable filing route.

Non-Material Changes That May Be Filed Directly

Under the April 2024 framework, certain categories of PPM changes do not require submission through a Merchant Banker and may be filed directly with SEBI. These include updates in the following sections of the PPM:

• Market Opportunity / Indian Economy / Industry Outlook
• Track Record of the Investment Manager
• Risk Factors
• Legal, Regulatory and Tax Considerations

Specific direct-filing categories also include:

• Contact details of the AIF, sponsor, manager, trustee or custodian, subject to the conditions specified by SEBI
• Changes in service providers such as the auditor, RTA, legal advisor or tax advisor
• Changes in fund size or commitment period
• Changes in the Key Investment Team, subject to at least one key personnel continuing to meet the eligibility criteria under the AIF Regulations
• Changes in Key Management Personnel, except those arising from a change in control
• Changes in the advisory board, investment committee or other committee composition, except where such committees are set up to approve the decisions of the AIF
• Reduction in fees, expenses or costs charged to the fund or investors
• New disclosures required pursuant to a regulatory mandate
• Factual and routine updates such as designation, qualification, compliance officer, operating partner or glossary changes.

Direct filings should follow SEBI’s prescribed format and, where applicable, include the prescribed undertaking.

Material Changes That Still Require Merchant Banker Certification

SEBI continues to apply a stricter standard to changes that affect the fundamental attributes of the fund or scheme or that could significantly influence an investor’s decision to remain invested. For such changes, Merchant Banker involvement remains mandatory, along with an independent due diligence certificate in the prescribed format. Examples include:

• Change in Sponsor or Manager of the AIF
• Change in control of the manager or sponsor
• Change in fee structure or hurdle rate that may result in higher fees being charged to unit holders.

For material changes, dissenting investors must be offered an exit option. The exit process must be completed within three months under the oversight of the trustee or sponsor, as applicable.

Large Value Funds: A Separate Relaxation

Large Value Funds or LVFs, structured exclusively for Accredited Investors are exempt from the Merchant Banker requirement for PPM change filings. For such funds, any PPM changes may be submitted directly to SEBI, subject to a signed and stamped undertaking from the CEO and Compliance Officer of the manager and compliance with SEBI’s prescribed format.

What Fund Managers Should Do Now

Fund managers should compile all changes made to the PPM and fund documents across schemes during FY 2025–26, classify each change under the April 2024 framework, engage a Merchant Banker where required, prepare prescribed undertakings where applicable and complete the necessary filings and investor intimations within the prescribed timeline. Where a change does not clearly fall within SEBI’s direct-filing categories, it should be assessed carefully with legal and compliance advisors before the filing route is finalised.

Note: For teams looking to complete the full cycle properly and on time, Taghash can support end-to-end across PPM change review, filing coordination, compliance documentation and SEBI-ready support.

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