SEBI Approves GARUDA Framework To Accelerate Alternative Investment Fund Scheme Launches

2012. The initiative builds on previous efforts by the regulator to streamline the processing of placement memorandums and improve operational efficiency within the alternative investment sector.

One of the most significant changes introduced under the GARUDA framework is the reduction in launch timelines for Regular Schemes. These schemes, which include non accredited investor focused AIF offerings, can now be launched within 10 working days.

Regular Schemes will continue to submit their placement memorandums through SEBI registered merchant bankers. While the filing process remains in place, the revised timeline is expected to help fund managers deploy capital more quickly and respond faster to market opportunities.

SEBI has also introduced a separate and significantly faster route for Accredited Investor only schemes and Angel Funds. Under the new framework, these categories will no longer be required to route their private placement memorandums through merchant bankers.

Instead, eligible schemes can launch immediately after obtaining registration or filing the required placement memorandum with the regulator.

According to SEBI, this exemption reflects the higher level of sophistication and financial understanding associated with Accredited Investors. Angel Funds operating under this route will also consist exclusively of Accredited Investors.

The framework was discussed by the Alternative Investment Policy Advisory Committee in April 2026 before being released for public consultation in May. Feedback received from industry participants and stakeholders was incorporated into the final version approved by the board.

Although the launch process has been simplified, SEBI has emphasized that regulatory accountability remains unchanged. For Accredited Investor only schemes and Angel Funds, compliance responsibility will rest with the AIF manager’s chief executive officer or equivalent authority, along with the compliance officer. Both parties will be required to provide formal undertakings confirming adherence to regulatory requirements.

For Regular Schemes, the merchant banker review process will continue alongside the revised launch timeline.

SEBI has also indicated that post filing scrutiny will remain an important part of the regulatory framework. The regulator will continue reviewing selected scheme documents through risk based assessments and may take action against fund managers, AIFs, or merchant bankers if any irregularities are identified.

The approval of GARUDA represents another step in SEBI’s broader agenda to improve ease of doing business within India’s financial markets. By reducing procedural delays while maintaining oversight mechanisms, the regulator aims to create a more efficient environment for fund managers and investors alike.

As the alternative investment industry continues to grow, faster scheme launches could enhance capital availability, improve market responsiveness, and strengthen India’s position as an increasingly attractive destination for private investment.