Alternative Investment Fund

Ongoing SEBI Compliance & Reporting Oversight

We support AIFs in meeting periodic regulatory obligations and maintaining disciplined compliance processes.

Scope Includes:

• SEBI filings and regulatory reporting
• Compliance calendar preparation & monitoring
• Disclosure review
• Compliance health checks
• Regulatory correspondence support

Outcome:
Timely reporting and reduced regulatory exposure.

Risk-Based Internal Audit of Fund Operations

Our internal audit framework is aligned with SEBI (AIF) Regulations and industry best practices. The scope of review is tailored to the structure, category, and operational model of the fund.

Review Areas:

 Regulatory & Compliance Oversight

• Review of adherence to SEBI (Alternative Investment Funds) Regulations, 2012 and related circulars
• Evaluation of regulatory reporting processes and documentation
• Review of periodic compliance submissions and compliance test reports
• Assessment of adherence to internal compliance checklists

 Investor Onboarding & Contribution Controls

• Review of client onboarding framework
• Verification of KYC documentation and contribution agreements
• Review of CKYC / KRA compliance processes
• Assessment of drawdown mechanism and capital call procedures
• Review of unit allocation and allotment process

 Investment Governance & Limit Monitoring

• Review of investment policy and procedural framework
• Assessment of adherence to defined investment objectives and limits
• Evaluation of Investment Committee processes and documentation
• Monitoring of leverage limits (where applicable)
• Concentration and exposure review

 Investment Execution & Operational Controls

• Review of stock / asset selection process
• Assessment of broker empanelment and onboarding procedures
• Evaluation of trade execution controls
• Review of trade settlement processes and reconciliation controls

 Adherence to Private Placement Memorandum (PPM)

• Alignment with investment objectives, strategy and defined process
• Review of governance structure as per PPM
• Verification of principal terms of the fund / scheme
• Assessment of offer period, tenure and fund lifecycle compliance
• Review of minimum commitment and sponsor contribution requirements
• Evaluation of transfer, transmission and default provisions
• Review of fee structure, setup expenses and operating cost allocations
• Verification of requisite investor approvals, where applicable

 NAV & Valuation Review

• Review of valuation policy implementation
• Assessment of NAV (Net Asset Value) computation methodology
• Verification of income and expense allocation processes
• Review of valuation documentation and oversight controls

 Investor Reporting & Communications

• Review of investor holding statements and reporting framework
• Assessment of periodic reports and Statements of Account (SOA)
• Verification of timeliness and completeness of investor disclosures

 Distribution & Clawback Controls

• Review of distributor onboarding process
• Evaluation of redemption processing controls
• Review of distributor clawback mechanisms and documentation

 Investor & Distributor Grievance Redressal

• Review of investor grievance resolution framework
• Assessment of timeliness and adequacy of grievance handling
• Review of distributor grievance management processes

 Ongoing Regulatory Compliance Monitoring

• Review of monthly, quarterly and annual SEBI reporting
• Assessment of compliance test reports
• Verification of regulatory disclosures and certifications
• Benchmarking compliance processes against regulatory expectations

 Deliverable

A structured internal audit report including:

• Risk-rated observations
• Control gaps identified
• Practical remediation recommendations
• Management action tracking framework

Outcome:
Strengthened internal controls and audit-ready documentation.

Review in accordance with SEBI-mandated PPM Audit Requirements

Pursuant to the SEBI circular mandating annual audit of compliance with the terms of the Private Placement Memorandum (PPM), Alternative Investment Funds are required to conduct a review of adherence to the disclosures and conditions specified in the PPM.

We assist AIFs in conducting structured PPM compliance audits aligned with the regulatory framework prescribed by SEBI.

Regulatory Framework

This review is conducted in reference to:

• SEBI (Alternative Investment Funds) Regulations, 2012
• SEBI circular dated 05 October 2020 (and subsequent amendments) mandating annual audit of compliance with PPM terms
• Reporting and disclosure requirements applicable to Category I, II and III AIFs

The scope and methodology are aligned with the applicable regulatory expectations at the time of engagement.

Scope of PPM Audit / Review

The review includes assessment of compliance with the representations, investment conditions, and operational commitments disclosed in the PPM, including:

Investment Framework

• Adherence to stated investment objectives and strategy
• Compliance with investment restrictions and concentration limits
• Monitoring of leverage provisions (where applicable)

Governance & Fund Structure

• Review of governance framework as disclosed
• Compliance with fund tenure, extension and closure provisions
• Sponsor contribution requirements

Financial & Commercial Terms

• Verification of management fee structure
• Review of expense allocation methodology
• Setup costs and operating expense treatment
• Distribution waterfall mechanism

Investor Rights & Commitments

• Minimum commitment thresholds
• Transfer / transmission provisions
• Default clauses and related actions
• Requisite investor approvals (where required under PPM)

Reporting & Disclosure

• Compliance with reporting commitments made to investors
• Review of material deviations and disclosure thereof

Deliverables

• PPM Compliance Audit Report
• Identification of material deviations, if any
• Summary of observations and corrective recommendations
• Assistance in preparing deviation disclosures to investors (where applicable)

Outcome:
Enhanced transparency and investor assurance.

Designing Robust Oversight Structures

We assist in building documented governance and compliance systems aligned with regulatory expectations.

Advisory Covers:

• Compliance manual drafting
• SOP development
• Risk & control matrix design
• Trustee / board reporting templates
• Delegation & escalation frameworks

Outcome:
Clear accountability and documented control environment.

Inspection-Ready Documentation & Response Assistance

Support during regulatory inspections and information requests.

Services Include:

• Pre-inspection readiness review
• Documentation structuring
• Drafting responses to regulatory queries
• Advisory during inspection process

Outcome:
Structured response management and minimal operational disruption.