SEBI Aims to Accelerate AIF Launches via Proposed ‘GARUDA’ System

The Securities and Exchange Board of India (SEBI) has proposed a new mechanism, named GARUDA, to shorten the timeline for launching schemes under alternative investment funds (AIFs), as per news reports.  

Under the proposal, AIF schemes could be launched within 10 working days of filing placement memorandums, against the current 30-day waiting period. 

GARUDA, which stands for Green-Channel: AIF Rollout Upon Document Acknowledgement, was introduced through a consultation paper released on Monday.  

SEBI said the proposal is intended to simplify the processing of placement memorandums and improve the speed of capital deployment by investment funds. 

Growth In AIF Industry 

The regulator said the proposal comes amid continued growth in the AIF segment over the last few years. The number of registered AIFs rose to 1,849 as of March 31, 2026, from 732 5 years earlier. 

Cumulative commitments raised by AIFs stood at ₹15.74 lakh crore as of December 31, 2025. Net investments made through these funds were reported at ₹6.45 lakh crore during the same period. 

Under the proposed framework, regular AIF schemes filed through a merchant banker may proceed with launch if SEBI does not raise observations within 10 working days. 

Separate Rules for Accredited Investor Schemes 

SEBI has also proposed changes for Accredited Investor-only schemes and Angel Funds. These categories may no longer need to file placement memorandums through merchant bankers.  

Instead, filings could be made directly with the regulator by the fund manager, along with undertakings from the Chief Executive Officer and Compliance Officer of the AIF manager. 

The consultation paper stated that such schemes may be allowed to launch immediately after filing the placement memorandum without waiting for regulatory review. 

Accredited Investor Participation Rises 

According to SEBI, the number of accredited investors increased 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 ₹1.91 lakh crore, accounting for nearly 30% of total AIF investments. 

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Conclusion 

SEBI said it will continue post-facto checks on scheme documents based on risk assessment. Public comments on the proposal have been invited until June 1, 2026. 

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