SEBI AIF Master Circular 2026: 6 Key Compliance Changes You Need to Know

1: ANGEL FUNDS — ACCREDITED INVESTORS ONLY (Sept 10, 2025)

This is the biggest structural shift. Angel Funds registered AFTER September 10, 2025 can ONLY raise from Accredited Investors. No retail, no exceptions.
For existing Angel Funds (registered before Sept 10): you have until September 8, 2026 to fully comply. You cannot onboard more than 200 non-accredited investors during transition. From Sept 8 onwards, zero retail investors.

The investment limit also dropped from ₹100 crore to ₹25 crore per investee company. This is a material constraint.
Regulation: SEBI/HO/AFD/AFD-POD-1/P/CIR/2025/128 (September 10, 2025)

2: NISM CERTIFICATION IS MANDATORY (Enforced June 25, 2025)

At least ONE member of your key investment team must have NISM certification — Series XIX-C or XIX-D for Cat I/II; XIX-C or XIX-E for Cat III.
This requirement was always in the regulations, but SEBI just formalized it with enforcement teeth. Registration denial for non-compliance is now explicit.
If your team isn’t certified, fix this before SEBI inspection.

3: LEVERAGE MONITORING TIGHTENED (Category III)

Leverage cap: 2x NAV. Breach protocol: same-day custodian report → next-day investor + SEBI notification → rectification by end of next trading day.
Miss this protocol? Material breach. Inspection exposure.
SEBI is monitoring leverage breaches daily via custodian reports. You cannot hide this.

4: NIL REPORTS ARE NOT OPTIONAL

Quarters with zero activity still require NIL filing. Missing even ONE is grounds for registration cancellation.
SEBI just cancelled an AIF registration (Order CGM/SM/AFD/HO/I/11648/2026, May 15, 2026) for failure to file NIL reports. This is not aspirational compliance — it’s a real precedent.

5: DEMATERIALIZATION MANDATORY FOR NEW INVESTMENTS (July 1, 2025)

Any investment made on/after July 1, 2025 must be held in demat form. Legacy investments (before July 1) have a limited exemption, but only if not deemed ‘controlled’ by the AIF.
Implications: coordinate with investee companies on demat readiness. Some founders push back; SEBI doesn’t care. Compliance is non-negotiable.

6: ACCREDITED INVESTOR FRAMEWORK (Ongoing)

AI-only schemes: minimum ₹10 lakh investment (vs ₹1 crore standard). Limited to Accredited Investors exclusively.
Large Value Funds (LVF): ₹25 crore minimum per investor. No merchant banker due diligence required — file under intimation to SEBI.
If launching new funds: include ‘AI only fund’ or ‘AIOF’ or ‘LVF’ in the scheme name (non-negotiable for SEBI filing).