Intimation to SEBI model
The PPM filing route for AI-only Funds and LVFs: filed directly with SEBI without a merchant banker or SEBI comments, so schemes can launch immediately on filing (a first scheme only once registered).
In plain language
Before an AIF can circulate its private placement memorandum (PPM) and raise money, the PPM has to be filed with SEBI. How that filing works depends on who the investors are.
For regular schemes, the process is heavy: the PPM goes through a SEBI-registered merchant banker, who does independent due diligence; SEBI may send comments that must be incorporated; and the scheme waits before launch.
For AI-only Funds and Large Value Funds for Accredited Investors (LVFs), the workbook describes a lighter route. They are exempt from filing through merchant bankers and from incorporating SEBI's comments, because these schemes are launched under the "intimation to SEBI" model. They can launch immediately upon filing the PPM with SEBI — though their first scheme can only launch from the date SEBI grants registration.
The logic is investor protection in proportion: accredited investors are treated as able to look after themselves.
How it works
Regular schemes versus the intimation model (section 9.5):
| Regular schemes | AI-only Funds and LVFs | |
|---|---|---|
| Filed through | SEBI-registered merchant banker | Directly on the SEBI Intermediary Portal |
| Due diligence certified by | Merchant banker (due diligence certificate) | CEO and Compliance Officer of the Manager, by signed and stamped undertaking |
| SEBI comments | Must be incorporated before launch | Exempt |
| Launch timing | After 10 working days of filing; first scheme on registration or after 10 working days, whichever is later | Immediately upon filing; first scheme from date of registration |
| PPM disclaimer | Merchant banker has exercised due diligence | The Manager has exercised due diligence; CEO and Compliance Officer certified |
| Changes to PPM terms | Intimated through the merchant banker; consolidated within 1 month of FY end | Filed directly with SEBI with a CEO undertaking — no merchant banker |
Working days exclude Saturdays, Sundays and public holidays on which the SEBI office is closed.
Whatever the route, the disclaimer is the same on one point: submission of the PPM to SEBI is not approval — SEBI does not take responsibility for the accuracy of disclosures or the manager's performance.
Who qualifies. Chapter 15: an AI-only Fund is a scheme in which every investor, other than the manager, sponsor and their employees or directors, is an accredited investor; an LVF additionally needs each such investor to invest not less than Rs 25 crore. AI-only Funds include LVFs.
A worked example
The managers and dates are illustrative; the timelines are the workbook's.
Two managers, each already registered and each launching a second scheme, file PPMs on Monday, 3 August 2026.
Manager A — a regular Category II scheme open to non-accredited investors committing Rs 1 crore each.
Filed through merchant banker, with due diligence certificate
Working days counted: Tue 4 Aug … Mon 17 Aug (Sat 15 Aug is not a working day)
10th working day: Monday 17 August
Manager A can launch only after those 10 working days, and must incorporate any comments SEBI sends in the meantime.
Manager B — an AI-only scheme where every investor holds accreditation.
Filed directly on the SEBI Intermediary Portal with the scheme fee
+ undertaking signed by the CEO and Compliance Officer
Launch: 3 August, immediately upon filing
Manager B raises commitments two weeks earlier. The price is responsibility: its PPM disclaimer says the Manager, not a merchant banker, has independently exercised due diligence — and the CEO and Compliance Officer have personally certified the disclosures as true, fair and adequate.
Had Manager B been launching its first scheme, it could launch only from the date SEBI grants registration.
Why NISM asks about it
Chapter 9, section 9.5 (Private Placement Memorandum — modalities for regular schemes and for AI-only Funds and LVFs), describes the model, the undertaking, the disclaimer and the treatment of PPM changes. Chapter 15, section 15.4.4 (Large Value Fund for Accredited Investors and Accredited Investors only Fund), defines who qualifies. Expect "which schemes can launch immediately on filing", the merchant banker exemption, and the first-scheme exception.
Common exam traps
- Immediate launch on filing applies to AI-only Funds and LVFs — not to regular schemes, which wait 10 working days.
- First scheme exception: even under the intimation model, a first scheme launches only from the date of SEBI registration.
- No merchant banker does not mean no certification. The CEO and Compliance Officer of the Manager sign an undertaking.
- Filing is not approval under either route — both disclaimers say so.
- Changes to PPM terms are filed directly by AI-only Funds and LVFs, with a CEO undertaking.
- Angel Funds — a workbook inconsistency. Section 9.5 opens by grouping LVFs, AI-only Funds and Angel Funds as the second category, but the modalities under that heading, and the intimation model, mention only AI-only Funds and LVFs; a footnote separately classes Angel Funds among non-LVF schemes. Answer a question on the intimation model with AI-only Funds and LVFs.
- The 10-working-day rule for regular schemes is dated in the workbook to amendments effective July 14, 2026 and a circular of April 30, 2026 — a recent change, so older study material may show a different timeline.
Where this is taught
Free preparation for NISM Series XIX-ERelated terms
- Accredited InvestorAn investor certified by an accreditation agency as meeting SEBI's income or net-worth tests, and therefore allowed into products on relaxed terms — including below the Rs 1 crore AIF floor.
- Compliance OfficerThe separately appointed officer of a merchant banker, listed company or intermediary who monitors compliance with securities law, handles investor grievances, and reports non-compliance to SEBI independently.
- Merchant bankerA SEBI-registered body corporate engaged in the business of issue management — arranging the selling, buying or subscribing of securities, or acting as manager, consultant or adviser in relation to an issue.
- Private placement memorandumThe offer document of a Category III AIF, filed with SEBI through a merchant banker at least 30 days before a scheme launches — and the document SEBI comments on but never approves.
- Due diligence certificateThe formal certificate a lead manager signs and files with SEBI at prescribed stages of an issue, confirming that it has verified the issuer's disclosures and that the offer document is compliant.
- Large Value Fund for Accredited InvestorsAn AIF or scheme in which every investor other than the manager, sponsor and their employees or directors is an accredited investor committing at least Rs 25 crore — with lighter regulation.
- Accredited Investors only (AI-only) FundAn AIF or scheme in which every investor apart from the manager, sponsor and their employees or directors is an accredited investor — a class SEBI lets launch on intimation, with lighter investor-protection rules.
- Working daysFor AIF filings and reporting, all days excluding Saturdays, Sundays and public holidays on which the concerned SEBI office is closed for business, as published on SEBI's website.
- GARUDASEBI's Green Channel: AIF Rollout Upon Document Acknowledgement — the fast-track route that lets an AIF launch a scheme and circulate its PPM 10 working days after filing.
- Regular schemeAn AIF scheme that is not an LVF, an Accredited Investor Only Fund or an Angel Fund — so its PPM must be filed through a merchant banker at least 10 working days before launch.