Source: ET
Context:
The Securities and Exchange Board of India (SEBI) has extended the deadline for angel funds to disclose their allocation methodology in the Private Placement Memorandum (PPM) to 31 January 2026. The earlier deadline was 15 October 2025.
Key Update:
- Reason for Extension: Based on representations from the Alternative Investment Fund (AIF) industry, which sought more time to comply with the new disclosure norms.
- Objective: To provide ease of compliance and allow angel funds adequate time to align their documentation with SEBI’s requirements.
Angel Funds:
- SEBI-registered Category I Alternative Investment Funds (AIFs) that invest in early-stage startups, providing risk capital and mentorship.
- Objective: Support innovation and entrepreneurship by funding high-growth potential startups.
- Eligibility: Typically raised from high-net-worth individuals (HNIs) and family offices.
- Regulation: Governed under SEBI (Alternative Investment Funds) Regulations, 2012.
Private Placement Memorandum (PPM):
- A formal document issued to prospective investors by a fund manager detailing the investment strategy, risk factors, allocation methodology, fees, and terms of investment.
- Purpose:
- Ensure transparency and informed decision-making.
- Disclose allocation methodology — how investment funds will be distributed across startups.
- Highlight risks, fund objectives, and regulatory compliance.
- Importance for Angel Funds:
- Helps investors understand fund deployment strategy.
- Mitigates regulatory risks and aligns with SEBI guidelines.
