SEBI Introduces GARUDA Framework to Fast-Track AIF Scheme Launches

The Securities and Exchange Board of India (SEBI) has introduced an operational framework for the Green-Channel: AIF Rollout Upon Document Acknowledgement (GARUDA) mechanism to simplify and accelerate the launch of schemes by Alternative Investment Funds (AIFs). 

The framework follows the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2026, and aims to reduce the time taken for launching eligible AIF schemes while strengthening disclosure standards. 

What Is the GARUDA Framework? 

Under the GARUDA mechanism, AIFs launching regular schemes can proceed with the launch 10 working days after filing the Placement Memorandum (PPM) with SEBI through a registered merchant banker, unless the regulator advises otherwise. 

For a first-time scheme, the launch can begin from the date of SEBI registration or after the 10-working-day period from filing the application, whichever is later. 

Relaxation for AI-Only Funds, LVFs and Angel Funds 

SEBI has introduced a simplified process for: 

These funds are not required to file their Placement Memorandum through a merchant banker and can launch their schemes immediately after filing the PPM with SEBI. 

Additionally, first schemes of AI-only Funds and LVFs can be launched from the date of SEBI registration, while Angel Funds can circulate their Placement Memorandum to investors from the date of registration. 

Read More: SEBI Issues Consultation Paper on AIF Investor Consent and Conflicted Transactions 

Merchant Banker Due Diligence Requirements 

For regular AIF schemes, SEBI has made it mandatory for merchant bankers to independently verify all disclosures in the Placement Memorandum and certify that they are true, fair, and adequate. 

The regulator has also clarified that the appointed merchant banker cannot be an associate of the AIF, its sponsor, manager, or trustee. 

For AI-only Funds, LVFs and Angel Funds, responsibility for disclosures will rest with the AIF manager, supported by an undertaking from the chief executive officer and compliance officer. 

Other Key Changes 

SEBI has also introduced the following requirements: 

The circular has come into effect immediately and applies to all AIF scheme Placement Memorandums filed with SEBI from the notification date of the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2026. 

Conclusion 

SEBI's GARUDA framework introduces a faster and more streamlined process for launching AIF schemes while maintaining disclosure standards. The new mechanism also provides compliance relaxations for Accredited Investor-only Funds, Large Value Funds, and Angel Funds, with the framework taking effect immediately. 

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