SEBI Rolls Out GARUDA Framework to Expedite Fund Launches

The Securities and Exchange Board of India (SEBI) has introduced a new regulatory framework, GARUDA (Green-channel: AIF Rollout Upon Document Acknowledgement), designed to simplify and accelerate the launch of new schemes by alternative investment funds (AIFs).

Under the new system, AIFs can now launch regular schemes within ten working days of filing their private placement memorandum (PPM) with SEBI through a registered merchant banker. This significantly reduces the time compared to previous procedures, which often involved longer regulatory reviews and caused delays.

The framework distinguishes between regular schemes and specialized funds, such as large value funds (LVFs) and angel funds. These specialized funds receive a lighter treatment, allowing them to launch a scheme immediately after filing their PPM with SEBI directly, bypassing the merchant banker intermediation for the initial launch.

SEBI clarifies that the filing of a PPM does not constitute regulatory approval, and merchant bankers remain accountable for any omissions or misleading statements. The regulator aims to rely more on disclosures and certifications, shifting from pre-launch scrutiny to post-facto supervision and enforcement.