SEBI Introduces GARUDA Framework To Enable Faster AIF Scheme Launches

Following the amendments to the AIF Regulations on July 14, 2026, SEBI has introduced the ‘Green-channel AIF Rollout Upon Document Acknowledgement (GARUDA)’ framework to streamline the Private Placement Memorandum (PPM) filing process and accelerate the rollout of AIF schemes.

Key amendments:

1. Introduction of new definitions:

• Regular schemes refer to all AIF schemes other than Large Value Fund for Accredited Investors (‘LVF’), Accredited Investor Only Fund (‘AI Only Fund’) and Angel Funds.
• ‘Launch’ of a scheme means circulation of its PPM to investors for soliciting funds.
• Working days exclude Saturdays, Sundays and public holidays on which the relevant SEBI office is closed and published on the SEBI website.

2. Modalities for filing of PPM and launch of Regular Schemes:

• First scheme can be launched from the date of SEBI registration, or after 10 working days of filing SEBI application (whichever is later).
• Subsequent Regular Schemes can be launched after 10 working days of filing the SEBI application, unless SEBI advises otherwise.
• PPM must be filed via a SEBI-registered Merchant Banker on the SEBI Intermediary portal (SI), along with: Merchant Banker Due Diligence Certificate, Fit & Proper declarations, Sponsor/Manager minimum continuing interest declarations, and PAN details of key entities/individuals.
• Merchant Banker must independently verify all disclosures and cannot be an associate of the AIF / sponsor / manager / trustee.
• The details of the Merchant Banker shall be disclosed in the PPM along with a prescribed disclaimer.
• Both, the Merchant Banker and the Manager are responsible for the accuracy and completeness of the PPM and may face regulatory action for any deficiencies.

3. Modalities for filing of PPM and launch of schemes of AI Only Funds, LVFs and Angel Funds:

• Filing of PPM through a Merchant Banker is done away for AI Only Funds, LVFs and Angel Funds.
• The first scheme of AI Only Funds and LVFs can be launched from the date of grant of SEBI registration whereas subsequent schemes can be launched immediately upon filing the PPM with SEBI.
• Angel Funds can proceed with circulation of the PPM to their investors for soliciting funds from the date of grant of SEBI registration.
• PPM should contain prescribed disclaimer clause and is required to be filed on the SI portal along with prescribed undertaking by Chief Executive Officer of the Manager of the AIF (or equivalent) and Compliance Officer of Manager of the AIF.
• Mandatory naming convention of ‘AI Only Fund’ or ‘AIOF’ to be used in the suffix of Accredited Investor-only schemes and ‘LVF’ in the suffix of Large Value Funds schemes.

4. Changes in PPMs:

• Exemption to AI Only Funds, LVFs and Angel Funds from filing changes in the PPM through a Merchant Banker. Instead, PPM to be directly filed with SEBI along with the prescribed undertaking as mentioned above.

These amendments are effective immediately and applies to PPMs filed with SEBI on or after 14 July 2026.

AURTUS COMMENTS:

• AI Only Funds, LVFs and Angel Funds will continue to benefit from a streamlined filing process that does not require the involvement of a Merchant Banker, reflecting SEBI's differentiated regulatory framework for sophisticated investor categories.
• Through the GARUDA framework, SEBI seeks to expedite the launch of AIF schemes by reducing regulatory processing timelines and placing increased reliance on the due diligence undertaken by Merchant Bankers in the case of Regular Schemes, and by the Manager in the case of AI-only Funds, LVFs, and Angel Funds.
• SEBI has also introduced mandatory naming conventions for AI-Only Funds and LVFs, aimed at enhancing transparency and ensuring clear identification of these categories of funds.