Description
SEBI extends the deadline for existing Angel Funds to disclose their allocation methodology in PPMs from October 15, 2025 to January 31, 2026.
Summary
SEBI has granted a timeline extension for existing Angel Funds to comply with the requirement of disclosing a defined allocation methodology in their Private Placement Memorandums (PPMs). The original deadline of October 15, 2025 has been extended to January 31, 2026, following representations from the AIF industry requesting additional time for compliance.
Key Points
- Timeline extension from October 15, 2025 to January 31, 2026 for disclosure of allocation methodology
- Applies only to existing Angel Funds operating under AIF Regulations
- Extension granted based on industry representation for ease of compliance
- Post January 31, 2026, all investment allocations must follow the disclosed methodology in PPMs
- All other provisions of the September 10, 2025 circular on revised Angel Fund framework remain unchanged
Regulatory Changes
This circular modifies the implementation timeline specified in para 8.3 of SEBI circular dated September 10, 2025 on ‘Revised regulatory framework for Angel Funds under AIF Regulations’. The requirement to disclose allocation methodology remains the same, but the compliance deadline has been extended by approximately 3.5 months.
Compliance Requirements
For Existing Angel Funds:
- Must disclose a defined methodology in their PPMs for allocating investments among angel investors who approve such investments
- Must ensure allocation methodology is documented in PPMs by January 31, 2026
- Any investment made after January 31, 2026 must be allocated according to the disclosed methodology
- Investments made between October 15, 2025 and January 31, 2026 have flexibility during this transition period
Important Dates
- September 09, 2025: AIF Regulations amended to prescribe revised regulatory framework for Angel Funds
- September 10, 2025: SEBI circular issued on revised regulatory framework for Angel Funds
- October 15, 2025: Original deadline for allocation methodology disclosure (now extended)
- October 15, 2025: This circular comes into force with immediate effect
- January 31, 2026: New deadline for existing Angel Funds to disclose allocation methodology in PPMs
- Post January 31, 2026: All investments must be allocated per disclosed methodology
Impact Assessment
Market Impact: Minimal to none. This is an administrative relief measure affecting internal processes of Angel Funds.
Operational Impact: Provides existing Angel Funds with additional time (approximately 3.5 months) to develop, document, and disclose their allocation methodologies in PPMs. This reduces compliance pressure and allows for more thoughtful implementation of the allocation framework.
Industry Impact: Positive for the Angel Fund segment of AIFs, demonstrating regulatory flexibility in response to industry feedback. No impact on angel investors or investee companies directly.
Compliance Impact: Eases immediate compliance burden while maintaining the substantive requirement for transparent allocation methodologies.
Impact Justification
Administrative timeline extension for Angel Funds with no immediate market impact; provides additional compliance time for a specific AIF category