To prevent the circumvention of various laws and ensure compliance with regulatory frameworks, market Regulator Securities and Exchange Board of India (SEBI) has directed alternative investment funds (AIFs) and their managers to exercise specific due diligence on their investors and investments.

AIFs are required to avoid facilitating ever-greening of stressed loans or assets for RBI-regulated entities, adhering to RBI's norms for income recognition, asset classification, provisioning and restructuring.

On October 8, 2024, the Securities and Exchange Board of India (SEBI) issued a circular regarding specific due diligence requirements for Alternative Investment Funds (AIFs) and their managers. The circular,

SEBI aims to strengthen due diligence processes among AIF managers and protect the interests of eligible investors.

SEBI has issued a circular in which it has asked AIFs to do specific due diligence of certain investors to prevent any violation of laws. The standards for the due diligence will be set by Standard Setting Forum for AIFs (SFA). The investors specified by the circular are as under:

Due diligence has been mandated for schemes where investors from the same group contribute 50 per cent or more to the corpus before availing the benefits of QIB status

Sebi has directed Alternative Investment Funds (AIFs) and their managers to conduct specific due diligence on investors and investments to prevent regulatory circumvention. The guidelines include checks on investor eligibility,

Sebi has instructed Alternative Investment Funds to carry out due diligence on investors and investments to ensure compliance with laws and prevent illegal activities. This includes special checks for investments from countries bordering India and contributions over 50 percent.