Sebi Proposes 'GARUDA' Green-Channel Mechanism to Speed Up AIF Scheme Launches

Markets regulator Sebi on Monday proposed a new green-channel mechanism -- GARUDA-- for alternative investment funds (AIFs) to launch schemes to 10 working days of filing their placement memorandums from the current 30 days, in a bid to speed up the deployment of capital by them.

GARUDA, or Green-Channel: AIF Rollout Upon Document Acknowledgement, aims to streamline the Processing of Placement Memorandums (PPMs) filed with Sebi and further ease fundraising by AIFs.

Under the proposal, regular AIF schemes would be allowed to launch within 10 working days of filing the PPM with Sebi through a merchant banker, unless the regulator raises objections.

At present, AIFs can launch schemes only after 30 days from filing, Sebi said in its consultation paper.

For the first scheme of an AIF, launch would be permitted from the date of grant of registration or after 10 working days of filing the application, whichever is later. Sebi said the move would "further enable faster and efficient deployment of capital by AIFs" amid the rapid growth of the AIF industry and the increasing volume of scheme filings.

The regulator noted that the number of registered AIFs has risen to 1,849 as of March 31, 2026, from 732 five years ago.

Moreover, cumulative commitments raised by AIFs stood at Rs 15.74 lakh crore, while net investments reached Rs 6.45 lakh crore as of December 31, 2025.

Also, for Accredited Investor-only (AI-only) schemes and Angel Funds, Sebi has proposed to do away with the requirement of filing the PPM through a merchant banker. Instead, fund managers would be allowed to file the PPM directly with Sebi, accompanied by an undertaking from the chief executive officer and compliance officer of the AIF manager.

These schemes would also be allowed to launch immediately upon filing the PPM with Sebi, without waiting for a review period.

Sebi said accredited investors, who meet prescribed income or net-worth criteria, are financially sophisticated and capable of independently assessing complex investment products and associated risks.

The number of accredited investors grew sharply to 2,773 as of April 30, 2026, compared with 649 a year earlier. As of December 31, 2025, accredited investors held AIF units with a par value of about Rs 1.91 lakh crore, accounting for roughly 30 per cent of total AIF investments.

The regulator said it would continue to undertake post-facto scrutiny of scheme documents on a sample basis, based on risk assessment. Any irregularities or lapses in disclosures could invite regulatory action against the concerned entities.

The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals till June 1.