**Executive Summary**
This circular, issued by the Securities and Exchange Board of India (SEBI) on October 15, 2025, provides a relaxation in the timeline for Angel Funds to disclose their allocation methodology in their Private Placement Memoranda (PPMs). This relaxation extends the deadline for compliance to January 31, 2026. The circular is effective immediately.
**Key Points / Main Content**
* **Background:**
* The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 were amended and notified on September 9, 2025, prescribing a revised regulatory framework for Angel Funds.
* A SEBI circular dated September 10, 2025, outlined specific conditions and modalities for Angel Funds.
* **Original Mandate (September 10, 2025 Circular):**
* Existing Angel Funds were required to disclose a defined allocation methodology in their PPMs for investments with angel investor approval.
* Investments made by Angel Funds after October 15, 2025, were to adhere to the disclosed methodology.
* **Timeline Relaxation:**
* Based on industry requests, the deadline for compliance with the allocation methodology disclosure requirement has been extended to January 31, 2026.
* Allocations of investments made by existing Angel Funds post January 31, 2026, must follow the disclosed methodology in their PPMs.
* **Other Provisions:**
* All other provisions of the circular dated September 10, 2025 remain unchanged.
* **Availability:**
* The circular is available on the SEBI website under "Legal framework - Circulars" and "Info for - Alternative Investment Funds.”
**Impact Analysis**
**Angel Funds**
* **Impact:** The extended timeline provides additional time for Angel Funds to comply with the requirement to disclose their allocation methodology in their PPMs.
* **Action Required:** Angel Funds must disclose a defined methodology in their PPMs for allocating investments, and ensure that all investments made post January 31, 2026, are in accordance with the disclosed methodology.
**Alternative Investment Funds (AIFs) Industry**
* **Impact:** The industry receives a timeline extension for the compliance of angel funds, easing the administrative burden.
* **Action Required:** Take note of the new deadline and ensure Angel Funds are aware of the extended timeline.
Key Entities Referenced
Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012: Regulations governing Alternative Investment Funds in India, amended to prescribe the revised regulatory framework for Angel Funds.
Alternative Investment Funds (AIFs): Funds that invest in non-traditional assets like private equity, hedge funds, and real estate.
Angel Funds: A sub-category of Alternative Investment Funds (AIFs) that invest in early-stage or startup companies.
Securities and Exchange Board of India Act, 1992: Act that establishes the powers of SEBI to regulate the securities market and protect investor interests.
Securities and Exchange Board of India (SEBI): The regulator of the securities market in India, responsible for issuing and enforcing the circular.
CIRCULAR
SEBI/HO/AFD/AFD-POD-1/P/CIR/2025/136 October 15, 2025
To,
All Alternative Investment Funds (AIFs)
Sir/Madam,
Sub: Relaxation in timeline for disclosure of allocation methodology by Angel Funds
1. Securities and Exchange Board of India (Alternative Investment Funds) Regulations,
2012 (“AIF Regulations”) have been amended and notified on September 09, 2025, to
prescribe the revised regulatory framework for Angel Funds.
2. Subsequently, SEBI vide Circular dated September 10, 2025 on ‘Revised regulatory
framework for Angel Funds under AIF Regulations’ stipulated the specific conditions
and modalities with respect to various provisions pertaining to Angel Funds.
3. In terms of para 8.3 of the aforesaid SEBI circular, the following was mandated:
3.1. Existing Angel Funds shall disclose a defined methodology in their PPMs for the
purpose of allocating the investment among angel investors who provide
approval for such investment; and
3.2. Allocation of any investment made by such Angel Funds post October 15, 2025,
shall be in accordance with the methodology disclosed in the PPM.
4. Based on representation from the AIF industry requesting additional time to meet this
requirement, it has been decided to extend the said timeline to January 31, 2026, for
ease of compliance. Accordingly, allocation of any investment made by existing Angel
Funds post January 31, 2026, shall be in accordance with the defined allocation
methodology disclosed in their PPMs.
Page 1 of 25. All other provisions of the circular dated September 10, 2025 on ‘Revised regulatory
framework for Angel Funds under AIF Regulations’ shall remain unchanged.
6. This circular shall come into force with immediate effect.
7. This circular is issued with the approval of the competent authority and in exercise of
powers conferred under Section 11(1) of the Securities and Exchange Board of India
Act, 1992, read with Regulations 19G(4) and 36 of AIF Regulations, to protect the
interests of investors in securities and to promote the development of, and to regulate
the securities market.
8. The circular is available on SEBI website at www.sebi.gov.in under the categories
"Legal framework - Circulars" and "Info for - Alternative Investment Funds”.
Yours faithfully,
Manish Kumar Jha
Deputy General Manager
Tel no.: +91-22-2644 9219
manishkj@sebi.gov.in
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