Alternative Investment Fund Registration in India?

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How to Register an Alternative Investment Fund in India

The Alternative Investment Funds (AIF India) in India are registered with SEBI. AIFs are authorized to offer a range of asset classes, including public equity, commodities, currency, and currency derivatives such as currency futures and currency options.

What is an Alternative Investment Fund?

An Alternative Investment Fund is a fund that invests in alternative assets, with the primary distinction of being not traded on equity or debt markets. These are often private equity funds, hedge funds, venture capital funds, distressed debt funds, global macro strategies, and more.  It can be any kind of investment, from stocks to bonds to currencies. This type of fund is considered an “alternative” because it does not conform to the guidelines of what most people consider “normal.” The goal behind an alternative investment fund is to offer the investor an increased return on their money.

Types of Alternative Investments

Alternative investments are not traditional stocks and bonds, but instead involve a range of assets such as commodities, currencies, derivatives, and hedge funds. The advantage of alternative investments is that they typically offer higher returns than more conservative assets like stocks and bonds. 

List of the types of alternative investments

  1. Private Equity

  2. Private Debt

  3. Hedge Funds

  4. Real Estate

  5. Commodities

  6. Collectibles

  7.  Structured Products

Benefits of Alternative Investments

Alternative investments are an attractive tool for investors who want to balance their portfolios, diversify risk, and take advantage of potentially higher returns. Many alternative investments offer better returns than the more traditional ones, but they do include more risks.

How to Register an Alternative Investment Fund in India?

The article explains how to register alternative investment funds India. The process is more complicated than the registration of a mutual fund, but patience will be rewarded since it will open up possibilities for better returns.

  1. The applicant for registration as an Alternative Investment Fund under the SEBI (Alternative Investment Funds) Regulations, 2012 should submit an application to SEBI in Form A, along with all necessary documents.
  2. Within 21 working days of receiving the application, the applicant will receive a response from SEBI. The length of time it takes to register, on the other hand, is determined by how quickly the applicant fulfills the requirements.
  3. The applicant is advised to review the SEBI (Alternative Investment Funds) Regulations, 2012 for qualifying requirements and other information that may assist in the registration process.
  4. In the covering letter, the applicant must state whether or not:
  1. It is a Venture Capital Fund registered with SEBI. If so, give specifics.
  2. Prior to the application, it must have been performing the functions of an AIF. If so, give specifics.

 

  1. The applicant will submit the following as part of the registration process:
  1. Form A, duly filled out, numbered, signed, and stamped.
  2. Rs. 1,00,000/- in application fees, payable in Mumbai by bank draft in favor of “The Securities and Exchange Board of India.”

Conclusion

There are some costs incurred in the process which are not large, but they are significant. The cost of registration ranges from Rs. 5000 to Rs. 25000 depending on the type of fund that you want to register, whether it is a Mutual Fund or an ETF(Exchange Traded Fund), or UTI(Unit Trust of India).

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