SEBI Plans Faster AIF Scheme Launches Through GARUDA Framework

India’s alternative investment fund (AIF) industry, which has grown to 1,849 registered funds with cumulative commitments of ₹15.74 lakh crore, could soon see faster fundraising and quicker scheme launches.

On Monday, the Securities and Exchange Board of India (SEBI) proposed a new green-channel mechanism called GARUDA that would allow AIF schemes to launch within 10 working days of filing placement documents, instead of the current 30-day wait.

The proposal comes at a time when net investments by AIFs have climbed to ₹6.45 lakh crore as of 31 December, 2025, highlighting the sector’s rapid expansion and growing role in India’s capital markets.

What Is SEBI’s GARUDA Framework?

SEBI said GARUDA, short for Green-Channel: AIF Rollout Upon Document Acknowledgement, is designed to make the launch process of alternative investment fund schemes smoother and faster.

Under the proposed framework, fund managers would be able to roll out regular schemes within 10 working days of filing their placement memorandum through a merchant banker, unless SEBI raises objections during that period.

At present, AIFs have to wait for 30 days after filing before they can launch a scheme. According to the regulator, reducing this timeline could help speed up capital deployment in the market.

For first-time schemes, the launch would be permitted either after the registration is granted or after 10 working days from filing the application, whichever comes later.

Relaxation For Accredited Investor Schemes

SEBI has also proposed a separate relaxation for Accredited Investor-only schemes and angel funds. These categories may no longer need to route their placement memorandum filings through merchant bankers. Instead, the documents can be filed directly with SEBI by the fund manager along with declarations from the chief executive officer and compliance officer.

The regulator has suggested that such schemes should be allowed to launch immediately after filing without waiting for any review period. SEBI said accredited investors are financially sophisticated individuals capable of evaluating complex products and risks independently.

Data shared by the regulator showed that the number of accredited investors jumped to 2,773 as of 30 April, 2026, from 649 a year ago. These investors accounted for nearly 30% of total AIF investments, with holdings worth around ₹1.91 lakh crore.

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SEBI Invites Public Feedback

Even with the proposed relaxations, SEBI said it would continue post-facto scrutiny of scheme documents based on risk assessment. The regulator added that any disclosure lapses or irregularities could invite action against the entities involved.

SEBI has invited public comments on the consultation paper till 1 June.

Sources:

The Hindu Business Line

Business Standard