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Vivaik Sharma

Partner in the Investment Funds Practice at Mumbai office of Cyril Amarchand Mangaldas. Vivaik has over 11 years of experience of advising reputed fund houses on structuring and setting up investment vehicles like including venture capital funds, private equity funds, hedge funds, real estate funds, infrastructure funds, PIPE funds, fund of funds, pre-IPO funds. He has advised fund managers in structuring and formation of bespoke investment structures, obtaining regulatory approvals and with investor disputes. Vivaik has also represented DFIs and sovereign investor for their investments in fund vehicles and set-up curated managed accounts for global investors. He can be reached at vivaik.sharma@cyrilshroff.com.

Summary: SEBI has recently proposed an overhaul of the Portfolio Managers Regulations, opening doors that have stayed shut until now. Discretionary portfolio managers may soon be allowed to invest in pre-IPO securities and unlisted debt, while portfolio managers more broadly may be permitted to invest in overseas markets. A new, low-entry “MF-PMS” category is proposed for mutual-fund-only portfolios, alongside looser derivative limits for discretionary portfolio management and a fresh route for independent fund managers to operate under registered PMS players. But it’s not just about new investment avenues, Principal Officer qualifications, net worth requirements, and even the definition of “related party” are all set to change too. If implemented, these reforms could reshape how discretionary and non-discretionary portfolio management services operate in India, making the industry more innovative and investor-friendly.

Continue Reading SEBI’s Proposed Overhaul of the PMS Regulatory Framework
Procuring Investor Consent by AIFs: SEBI’s New Playbook for Voting and Conflict Management

Summary: On June 30, 2026, SEBI released a consultation paper proposing a standardised consent mechanism and an expanded conflict-of-interest framework for Alternative Investment Funds.

The AIF Regulations mandate investor consent for material decisions but are silent on methodology, resulting in inconsistent market practices. SEBI now proposes a framework offering AIFs a choice among three voting methods – Deemed Consent, Present and Voting, and Express Voting. Further, the current “associate” definition, anchored to a 15% shareholding threshold, fails to capture transactions where conflict is self-evident. SEBI proposes introducing a “related party” definition adapted from Section 2(76) of the Companies Act, 2013, deployed specifically within conflict provisions. This widens the net of transactions requiring 75% investor approval.

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SEBI Order Penalises Outsourcing of Core Functions: Structuring Lessons for Asset Management Industry

Summary: This blog analyses a recent SEBI order dated May 26, 2026, which penalised a portfolio manager for outsourcing core investment functions to a technology company under the guise of “technology consulting”. SEBI held that the prohibition on outsourcing core activities under the Outsourcing Circular and Applicable Laws is absolute, and that “investment decisions” extend beyond model portfolio approval to include all downstream steps such as quantities, timing, and client-level trade execution. The portfolio manager and its key personnel were restricted from onboarding new clients for 21 days and were collectively penalised Rs 42,00,000. The article draws broader structuring lessons for the asset management industry, cautioning that SEBI will look at substance over form, that fee structures linked to performance fees signal participation in the investment process, and that individuals in control will face personal liability.

Continue Reading SEBI Order Penalises Outsourcing of Core Functions: Structuring Lessons for Asset Management Industry

Summary: The SEBI, vide its Consultation Paper dated February 5, 2026, has proposed amendments to the existing AIF Regulations related to the winding up of AIF schemes and the surrender of AIF registrations. The proposal seeks to address challenges faced by AIFs that retain liquidated proceeds beyond the permissible fund life due to pending or anticipated litigation, tax contingencies, or residual operational expenses. The key proposals include (i) permitting AIFs to surrender their registration while retaining funds, with such AIF schemes being designated as inoperative funds, subject to rationalised compliance obligations; (ii) permitting retention of funds for anticipated liabilities, subject to the consent of a super-majority of investors; and (iii) permitting retention of funds for operational expenses for up to 3 (three) years. SEBI has invited public comments on the Consultation Paper until February 26, 2026.

Continue Reading SEBI Consultation Paper: Proposed Amendments to AIF Winding-Up and Surrender Framework
Enabling Differential Distribution for Alternative Investment Funds in IFSC

Summary: The International Financial Services Centres Authority (“IFSCA”) has proposed a new regulatory framework allowing Alternative Investment Funds (“AIFs”) in GIFT IFSC to create multiple unit classes with differential return profiles. The proposal facilitates AIFs with enhanced flexibility to raise capital from investors with varying risk appetites while also enabling blended finance structures that combine commercial, concessional, and philanthropic capital for sustainable investments. IFSCA’s proposed approach offers notably greater flexibility compared to SEBI’s domestic regulations, thereby enabling broader investor participation while maintaining robust investor protection measures.

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Beyond CPMS Route: SEBI Unlocks Co-Investment Schemes for AIFs

Summary: SEBI has introduced new Amendment Regulations and a CIV Circular allowing Category I and II AIFs to offer co-investment opportunities through Co-investment Schemes (CIV schemes). This provides an alternative to the existing Co-investment Portfolio Manager route under PMS Regulations. The new framework addresses limitations like additional registration costs and investor profile concerns. Key features…

RBI NOTIFIES RESTRICTIONS ON INVESTMENTS BY REGULATED ENTITIES IN AIFS

Summary: In a decisive move to recalibrate institutional investments and fortify the financial ecosystem, the Reserve Bank of India (RBI) has released the RBI (Investment in AIF) Directions, 2025. These comprehensive guidelines overhaul the existing framework governing how regulated entities (REs) such as banks, NBFCs, and other financial institutions allocate capital to Alternative Investment Funds (AIFs). With stricter exposure caps, mandatory provisioning requirements, and sharper focus on investment-linked risk, the Directions signal a more cautious regulatory stance—aimed at mitigating systemic vulnerabilities and curbing potential misuse of AIF structures. This blog unpacks the key provisions, their far-reaching implications, and the strategic shifts mandated for REs.

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Unlocking Platform Play at GIFT IFSC: IFSCA’s Move Towards a Liberal Framework

Summary: The IFSCA has introduced a framework for Third-Party Fund Management Services (TFMS) at GIFT IFSC, enabling external fund managers to launch restricted schemes via registered FMEs without establishing a physical presence. While promoting ease of entry and operational flexibility, the model includes safeguards such as a USD 50 million fund cap, enhanced net worth requirements, and mandatory scheme-level governance. Rooted in global best practices, the framework balances innovation with regulatory accountability.

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Introduction

Alternative investment funds (“AIF”) being considered an investment avenue for sophisticated investors with high risk-appetite and ticket-size, are subject to certain restraints in their marketing and placement to keep it restricted to the intended investors. The Securities and Exchange Board of India (“SEBI”) (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) define an AIF as[1] “a privately pooled investment vehicle which collects funds from investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors…”. Regulation 11[2] further provides that an “AIF shall raise funds through private placement by issue of information memorandum or placement memorandum, by whatever name called”. Moreover, it has been provided[3] that no scheme of an AIF shall have more than 1000 investors and where an AIF is set-up as a company, the provisions of the Companies Act, 2013 shall apply.[4]

Continue Reading AIF Marketing in India: What Fund Managers Must Know
SEBI Order casts - Spotlight on Conflicts of Interest of AIFs 

Introduction

The Securities and Exchange Board of India (“SEBI”), vide its settlement order dated May 06, 2025 (“Order”), has accepted a settlement application filed by the investment manager (“Manager”) of a real estate fund (“Fund”), sponsored by a related sponsor entity (“Sponsor”), for breach of various provisions of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”)[1], and the SEBI Master Circular for Alternative Investment Funds, dated May 7, 2024 (“Master Circular”)[2], subject to a payment of INR 36 lakh by the Manager on behalf of itself and the Fund. The Settlement Order emanated from a suo-moto application, seeking settlement of issues pertaining to conflict of interest and non-compliances in operations of the Fund.

Continue Reading SEBI Order casts Spotlight on Conflicts of Interest of AIFs