SEBI Launches GARUDA Green Channel framework for Alternative Investment Funds
The Security and Exchange Board of India (SEBI) has launched the GARUDA a green- channel to roll out the Alternative Investment Funds (AIF) upon document acknowledgement mechanism.
The Security and Exchange Board of India (SEBI) approved the GARUDA (Green Channel: AIF Rollout Upon Document Acknowledgement) mechanism to transition the Alternative Investment Funds (AIF) from old pre-clearance method to the fast-track and accountability driven traditional pre-clearance model. It is introduced by amending the SEBI (Alternative Investment Funds) regulations, 2012.
GARUDA aimed to reduce the bureaucratic bundles and reduce the time taken by the fund managers to raise the funds from the market by allowing the private capital flow into the country's economy by improving the ease of doing business.
Key features of the GARUDA green channel
-
New Classification: under the Green channel, SEBI has introduced the AIF schemes which are divided into Large Value Funds (LVFs), Accredited Investors (AI)-only schemes, Angel Funds and Regular Funds.
-
Reduce Timeline: it reduces the timeline to the 10 working days from the 30 days for all regular AIFs schemes.
-
Immediate launch eligibility: It allows accredited investors only schemes and Angel funds to launch their documents after the SEBI acknoledgement.
-
Compliance for AI-Only scheme: it removes the required mandate for Accredited Investor only and Angel funds to file private placement memorandums.
Under the GARUDA framework the LVFs will continue to be available only to accredited investors where each investor requires at least Rs. 25 crore and AI-only and Angel funds will be restricted to the accredited investors (no minimum investment has mentioned for the AI-only schemes).
The Alternative Investment Funds (AIF) are the pooled investment vehicles funds which are regulated by the SEBI. ATFs are collected from high net worth individuals or institutional investors to invest in private equities, real estate, hedge funds and commodities.
SEBI regulated the AIFs under the SEBI Mutual Funds Regulation, 1996, SEBI (Alternative Investment Funds) regulations 2012 and SEBI Collective Investment Schemes Regulations, 1999. SEBI has categories these funds under the three categories and sub categories:
-
Category I AIF: it includes Venture capital funds, Angel funds, SME funds, Social venture funds and infrastructure funds. These funds mostly invest in start-ups or early ventures.
-
Category II AIF: Funds like Real estate, private equity etc,. Those funds fall under this category which do not borrow or leverage to meet the daily operational requirements.
-
Category III AIF: funds fall under this category which involve high risks which are generally used for the high returns and required daily derivatives and leverage.
SEBI’s GARUDA framework focuses on the ease of doing business and easy market access for AIFs scheme by reducing the timeline and bringing transparency in the capital market and transforming the AIF sector.
Manisha Waldia is a distinguished content strategist with 5 years of experience crafting premium educational content for UPSC and State PCS, with a focus on deep conceptual analysis across Polity, Geography, History, and Environment. She currently brings this expertise to Jagran Josh, where she covers major national and international events, current affairs, and static general knowledge. Over her career, Manisha's specialized insights have led her to curate high-impact materials and serve as a UPSC Mains answer-evaluator for India’s top institutes—including Drishti IAS, Shubhra Ranjan IAS, Study IQ, GS Score, and PWonlyIAS. She has also worked alongside leading NGOs like Oxfam India and Avani Kumaon.
Contact: manisha.waldia@jagrannewmedia.com
