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Sebi rolls out ‘GARUDA’ framework to expedite new schemes by AIFs

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The Securities and Exchange Board of India (SEBI) has introduced a new framework called GARUDA (Green-channel: AIF Rollout Upon Document Acknowledgement) to simplify and expedite the launch of new schemes by alternative investment funds (AIFs).Under this green channel mechanism, AIFs can now launch regular schemes within ten working days of filing their private placement memorandum (PPM) with the regulator via a registered merchant banker, provided no regulatory concerns are raised. Newly registered AIFs may launch their first scheme upon receiving registration or ten days after filing their PPM, whichever is later.The framework aims to reduce approval timelines and shift the regulator's focus from pre-launch scrutiny to post-facto supervision and enforcement. For specialised vehicles such as large value funds (LVFs) for accredited investors, accredited investor-only funds (AIoFs), and angel funds, the process is further streamlined. These entities are exempt from filing their PPMs through merchant bankers and can launch schemes immediately upon filing the document with SEBI. Angel funds and first-time AIoFs or LVFs can commence operations once registration is granted.SEBI has also mandated strict naming conventions, requiring specialised schemes to include “AI only fund,” “AIOF,” or “LVF” in their titles. Additionally, the regulator has eased ongoing operational updates for these specialised vehicles, allowing the AIF CEO or compliance officer to file updates directly via a formal undertaking without merchant banker involvement. These provisions are effective immediately.