Annexure- A
Investor Charter for Alternative Investment Funds
A. Vision and Mission Statement:
Vision
To develop the Alternative Investment Fund (“AIF”) industry on professional and ethical lines and maintain high standards of governance and transparency.
Mission
- Maintain high professional and ethical standards within the AIF industry.
- Comply with all applicable regulations and co-operate with the regulators in all aspects of the AIF activity.
- Act in a fiduciary capacity towards the investors.
B. Details of business transacted by the organization with respect to the investors:
- To raise capital from domestic and global investors.
- To invest in portfolio companies in accordance with investment strategy stated in Fund documents, with an objective to generate positive returns for the stakeholders including investors.
- To distribute returns to the investors as per the fund documents.
C. Details of services provided to investors:
1. On-boarding of investors.
1.1. Sharing of Private Placement Memorandum (PPM).
1.2. Account opening with the AIF:
- Completing KYC of investors and registration of KYC with KRAs.
- Sharing of copies of fund documents with investors.
- Entering into contribution agreement with investor.
2. Obtaining investor consent for material changes to fund structure
- Change in the sponsor or the manager of the AIF.
- Change in control of the sponsor or the manager of the AIF.
- Material changes to terms of PPM:
- Term of Fund.
- Investment Strategy.
- Increase in fees and charges.
- Winding up of Fund/ Scheme prior to expiry of tenure.
3. Dissemination of financial information of Fund.
- Net Asset Value of Fund/ Scheme.
- Financial information of investee companies.
- Information on performance of scheme/fund.
4. Disclosures with respect to material risks associated with the fund and its portfolio investments.
- Any inquiries/ legal actions by legal or regulatory bodies in any jurisdiction.
- Any material liability arising during the tenure of the fund.
- Any breach of a provision of the PPM or any other agreement made with the investor or any other fund documents.
- Intimation regarding any conflict of interest.
- Risks associated with the portfolio, such as concentration risk, foreign exchange risk, leverage risk, realization risk, strategy risk, reputation risk, extra-financial risks such as social and corporate governance risks etc. at fund and investee company level.
5. Intimation of any non-material changes in the operations of the fund.
- Non-material changes such as:
- Bank account details
- Address of AIF or its Manager or Sponsor
- Contact details such as email-id, contact number, etc.
6. Grievance redressal
- Redressal of investor complaints received directly from investors and/ or from SEBI / SCORES.
D. Timelines of the activity/services provided to investors:
| Sr. No. | Description of activity/services provided by Alternative Investment Funds (AIFs) to its investors | Timeline for completion of activity |
|---|---|---|
| 1 | Valuation related disclosures: a. Valuation of investment by Category I and II Alternative Investment Fund |
At least once every six months. Can be extended to once a year with approval of 75% of its investors by value of investment. |
| b. Disclosure of NAV of scheme(s) of the Category III Alternative Investment Fund Close ended fund – quarterly basis Open ended fund – monthly basis |
||
| 2 | Transparency related disclosures: a. Disclosure of financial information of investee companies |
• Category I and II – within 180 days from the year end or earlier as per the fund documents. • Category III – within 60 days from the end of the quarter end or earlier as per the fund documents. |
| b. Disclosure of Material risks: concentration risk, foreign exchange risk at fund level and leverage risk, realization risk, strategy risk, reputation risk at investee company level, extra-financial risks such as social and corporate governance risks etc. at fund and investee company level |
||
| c. Financial, risk management, operational, portfolio, and transactional information regarding fund investments | To be disclosed periodically to the investors | |
| d. Any fees ascribed to the Manager or Sponsor; and any fees charged to the Alternative Investment Fund or any investee company | ||
| e. Any inquiries/ legal actions by legal or regulatory bodies in any jurisdiction | As and when occurred | |
| f. Any material liability arising during the Alternative Investment Fund’s tenure | ||
| g. Any breach of a provision of the placement memorandum or agreement made with the investor or any other fund documents | ||
| h. Intimation regarding conflict of interest in any transaction | As and when they arise or seem likely to arise | |
| i. Any change in terms of Private Placement Memorandum / fund documents | On consolidated basis within one month of end of each financial year | |
| 3 | Complaint handling related services: a. Response to complaint received from investors |
Within 30 days from the date of receipt of complaint |
| b. Redressal of investor complaint received from SEBI/ SCORES | Within 30 days from the date of receipt of complaint |
E. Details of grievance redressal mechanism and how to access it.
- Alternative Investment Funds are required to redress all investor complaints in timely manner.
- Procedure for dispute resolution including arbitration.
- Investors can approach SEBI through SCORES platform.
- Investors may send complaints to SEBI Bhavan, Bandra-Kurla Complex, Mumbai – 400 051.
F. Responsibilities of investors
1. Responsibility to inform and educate yourself
- Read thoroughly all fund documents.
- Consider all risks, fees, and factors.
- Ensure alignment with investment objective.
- Review portfolio regularly.
2. Responsibility to timely update your KYC
- Provide complete and accurate information.
- Timely updation of KYC.
3. Responsibility to abide by the contribution agreement
- Understand agreement terms.
- No guarantee of returns.
4. Responsibility to use right intermediaries
- Verify reliability of information sources.
5. Responsibility to maintain confidentiality
- Do not disclose non-public information.