The Securities and Exchange Board of India (SEBI) has notified the 2026 amendment to the SEBI (Alternative Investment Funds) Regulations, 2012, introducing key changes to investment norms, fund operations, and lifecycle management.
1. Reduction in Minimum Investment Threshold
Regulation 10(c) has been amended to:
- Reduce the minimum investment requirement from ₹2 lakh to ₹1,000
- Applicable for individual investors in Social Impact Funds investing in not-for-profit organisations (NPOs)
Impact:
- Significantly lowers the entry barrier
- Encourages wider retail participation
- Promotes inclusive financing for social impact initiatives
2. Framework for Winding-Up of AIF Schemes
Regulation 29(7) has been amended to:
- Empower SEBI to prescribe conditions for satisfying liabilities during winding-up
Impact:
- Ensures a more structured and transparent exit process
- Strengthens investor protection and fund governance
3. Introduction of “Inoperative Funds”
- A new Regulation 29(10A) has been inserted introduces the concept of “inoperative funds”
Impact:
- Enables SEBI to:
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- Identify and classify inactive AIFs
- Prescribe conditions for their treatment and monitoring
- Improves regulatory oversight and fund lifecycle management
4. Objective of the Amendments
The changes aim to:
- Promote financial inclusion in social investing
- Enhance regulatory clarity and control
- Strengthen AIF ecosystem governance
5. Conclusion
The amendments reflect SEBI’s focus on making AIFs more accessible, transparent, and well-regulated, while supporting the growth of impact investing and efficient fund management practices.
Click Here To Read The Full Notification
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