SEBI’s Reported GARUDA Route Seeks Faster Processing of AIF Placement Memoranda
The Securities and Exchange Board of India (SEBI) has introduced the "Green-Channel: AIF Rollout Upon Document Acknowledgement" (GARUDA) mechanism for processing placement memoranda (PPMs) of Alternative Investment Funds. Under the SEBI circular dated 30 July 2026, eligible schemes can be launched on the basis of SEBI's acknowledgement of the filed documents, instead of waiting for SEBI's comments on the PPM.
The circular, numbered HO/19/19/11(2)2026-AFD-RAC2/I/17617/2026, is addressed to all AIFs and merchant bankers. It operationalises amendments made to the SEBI (Alternative Investment Funds) Regulations, 2012 through the SEBI (AIF) (Second Amendment) Regulations, 2026, notified on 14 July 2026. It was issued under Section 11(1) of the SEBI Act, 1992, read with Regulations 12, 19 and 36 of the AIF Regulations.
When a scheme can be launched
| Type of fund or scheme | Who certifies the PPM | Earliest launch |
|---|---|---|
| Regular schemes (other than AI only funds, LVFs and angel funds) | Merchant banker, through a due diligence certificate | After 10 working days of filing; for a first scheme, from the date of registration or 10 working days after filing, whichever is later |
| Accredited Investor only funds (AI only funds) | Undertaking signed by the CEO and Compliance Officer of the manager | Immediately upon filing |
| Large Value Funds (LVFs) | Undertaking signed by the CEO and Compliance Officer of the manager | Immediately upon filing |
| Angel funds | Undertaking signed by the CEO and Compliance Officer; no merchant banker needed | From the date of grant of SEBI registration |
"Working days" exclude Saturdays, Sundays and days on which SEBI's office is closed, according to the circular text.
Filing requirements for regular schemes
For a regular scheme, the filing must include the merchant banker's due diligence certificate in the format at Annexure 6, fit and proper declarations under Schedule II of the SEBI (Intermediaries) Regulations, 2008, details of the minimum continuing interest of the sponsor or manager, the applicable scheme fee, and PAN copies of the AIF, the scheme, sponsors, managers, trustees, directors and key investment personnel.
The merchant banker must "independently exercise due diligence of all the disclosures" in the PPM and cannot be an associate of the AIF, its sponsor, manager or trustee. For AI only funds, LVFs and angel funds, the manager's CEO and Compliance Officer instead file an undertaking in the Annexure 7 format.
New disclaimer and naming rules
Every PPM filed under GARUDA must carry a disclaimer. For regular schemes it states that the merchant banker has certified that the disclosures are true, fair and adequate; for AI only funds and angel funds it states that the manager has independently exercised due diligence and that the CEO and Compliance Officer have certified the disclosures. Both versions add that submission of the PPM to SEBI "should not in any way be deemed or construed that the same has been approved by SEBI", and that SEBI does not assume responsibility for the accuracy of disclosures, facts and claims in the PPM.
AI only funds must include "AI only fund" or "AIOF" in the scheme name, and LVFs must include "LVF". AI only funds, LVFs and angel funds can also file changes to an existing PPM directly with SEBI, backed by the CEO and Compliance Officer undertaking, without a merchant banker.
Liability shifts to the filer
Faster launches come with direct accountability. The circular states that the merchant banker and the manager "shall be responsible for ensuring the accuracy and completeness of all disclosures", and that in case of any irregularity or lapse in the PPM, the entities concerned "shall be liable for action".
From when it applies
The circular came into force immediately and applies to PPMs of all schemes and funds filed with SEBI from the date of notification of the SEBI (AIF) (Second Amendment) Regulations, 2026.
What managers and advisers should do
- Classify each proposed scheme correctly (regular, AI only, LVF or angel fund), since the launch timeline and the certifying person depend on it.
- For regular schemes, engage an independent merchant banker early and allow for the 10-working-day wait.
- For CEO and Compliance Officer undertakings, keep a clause-by-clause review of the PPM and an approval trail, because there is no pre-launch SEBI review to catch errors.
- Update scheme names and PPM disclaimers to the new wording.
- Align investor onboarding, drawdown notices and custodian and administrator timelines with the earlier launch dates.
Updated on 28 September 2026: added the circular number, the launch timeline for each fund type, filing documents, disclaimer and naming rules, liability and effective date, all verified against SEBI's circular of 30 July 2026.
