SEBI Clarifies Broad-Based Fund Norms for AIFs

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  • Last Updated on 13 April, 2026

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SEBI broad-based fund

Issue No.:1/9052/2026, Dated: 09.04.2026

The Securities and Exchange Board of India (SEBI) has provided clarification regarding the applicability of the broad-based fund requirement to Alternative Investment Funds (AIFs) and their schemes under the Mutual Fund (MF) Regulations.

1. Applicability to Advisory/Management Services

SEBI clarified that:

  • The broad-based fund requirement applies to entities providing management or advisory services to AIFs
  • This ensures that such services are extended only to funds meeting prescribed diversification criteria

2. Assessment at Scheme Level

  • Compliance with the broad-based requirement shall be evaluated at the scheme level, and not merely at the fund level

This ensures granular compliance across different investment strategies within a fund.

3. Independent Compliance by Each Fund

  • Each fund, including feeder funds
  • Must independently satisfy the broad-based criteria

This prevents reliance on compliance at a group or umbrella level.

4. No Exemption for Domestic Entities

  • SEBI has clarified that domestic entities are not eligible for any exemption from this requirement

5. Conclusion

The clarification reinforces SEBI’s focus on investor diversification and regulatory consistency, ensuring that AIF structures and their schemes adhere to broad-based participation norms at an individual level.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied