SEBI clarifies modalities for filing of placement memorandum through a Merchant Banker

On October 21, 2021, the Securities and Exchange Board of India (SEBI) has issued a circular to provide specifications on Modalities for filing of placement memorandum through a Merchant Banker under SEBI (Alternative Investment Funds) Regulations, 2012. The  provisions  of  this  circular  shall  come  into  effect  from November  11, 2021.

KEY POINTS:

 

  • The   Merchant   Banker   shall   independently   exercise   due   diligence   of   all   the disclosures  in  the  placement  memorandum,  satisfy itself with  respect  to  veracity and adequacy of the disclosures and provide a due diligence certificate. The format of due diligence certificate is given at Annexure A.
  • While  filing draft placement  memorandum  at  the  time  of registration  or prior  to launch of new scheme on the SEBI intermediary portal, the due diligence certificate provided   by   the   Merchant   Banker   shall   also   be   submitted,   along   with   other necessary documents.
  • Details of the Merchant Banker shall be disclosed in the placement memorandum.
  • Further,  in  terms  of paragraph  4  of SEBI  Circular  dated  April  07,  2021, AIFs  are required to    intimate SEBI    regarding any    changes    in   terms    of   placement memorandum  on  a  consolidated  basis,  within one month  of  the  end  of  each financial  year. Such intimation shall  also  be submitted  through  a Merchant  Banker, along  with the due  diligence  certificate provided by  the Merchant  Banker. The format  of  due  diligence  certificate  for intimating  the  changes  in  the placement memorandum is given at Annexure B.
  • The  Merchant  Banker appointed  for  filing  of  placement  memorandum shall not be an associate of the AIF, its sponsor, manager or trustee.

 

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