AIF Compliance in India: A Guide for Compliance Officers
Alternative Investment Funds operate within a regulatory framework that spans the fund, the AIF manager, investors, investment activities, and supporting service providers. The compliance function therefore has to maintain visibility across obligations that arise at different stages of the fund lifecycle, from onboarding and investment decisions through ongoing reporting, disclosures, valuation, governance, and investor servicing.
AIF compliance requirements can also change as SEBI introduces new regulations, circulars, master circulars, reporting requirements, and clarifications. These changes may create new obligations, modify existing processes, or require additional documentation and controls. For compliance teams managing multiple schemes or funds, maintaining an accurate view of which requirements apply to each entity and activity becomes an important part of the compliance operating model.
A structured AIF compliance framework should therefore connect each applicable regulatory requirement to the activity required to fulfil it, the responsible owner, the relevant frequency or due date, and the evidence required to demonstrate completion. This creates a traceable compliance process in which regulatory requirements can be monitored, assigned, completed, reviewed, and reported through their lifecycle.
That framework becomes particularly important when compliance teams need to demonstrate the status of obligations to senior management, trustees, auditors, investors, or regulators. AIF compliance is consequently closely linked to the quality of the underlying compliance records, evidence, reporting processes, and governance controls maintained by the fund and its manager.
Key Areas of AIF Compliance
AIF compliance in India, similar to asset management compliance, covers a broad set of regulatory and operational requirements that need to be managed throughout the life of the fund. The applicable obligations depend on the structure of the AIF, its manager, investment activities, investor base, and other characteristics of the fund. For a compliance team, these requirements typically span several interconnected areas.
Regulatory and governance requirements include maintaining the governance framework prescribed for the AIF and its manager, ensuring compliance with applicable SEBI requirements, maintaining required records and policies, and monitoring changes to the regulatory framework.
Investment-related compliance covers requirements governing investments, investment restrictions, concentration, valuation, conflicts of interest, and other conditions applicable to the AIF’s investment activities. These requirements need to be translated into processes and controls that can be applied consistently across relevant transactions and portfolios.
Investor and disclosure obligations include requirements relating to investor communications, disclosures, reporting, and other information that must be provided to investors or maintained by the AIF and its manager. The compliance team needs to track the applicable requirements, responsible owners, reporting frequency, and supporting documentation.
Regulatory reporting and filings form another recurring component of AIF compliance. Periodic submissions and regulatory reporting require accurate information from multiple functions and, in some cases, multiple entities. Establishing clear ownership, due dates, review processes, and evidence trails helps maintain consistency across recurring submissions.
Risk, valuation, and operational controls also form part of the compliance framework. These areas may involve coordination between the compliance, investment, finance, operations, risk, and external service-provider teams. Maintaining clear links between the underlying requirement, the control or activity performed, and the evidence generated provides the compliance function with a consolidated view of its obligations.
Building an AIF Compliance Framework
An AIF compliance framework needs to account for requirements that operate at different frequencies and involve different functions across the fund and its manager. SEBI’s framework includes recurring regulatory reporting, annual compliance testing, investor and disclosure requirements, and obligations arising from the investment and operational activities of the AIF.
The June 2026 Master Circular, for example, requires AIFs to submit a comprehensive Annual Activity Report and a Quarterly Activity Report, while the manager is required to prepare a Compliance Test Report at the end of the financial year.
For a compliance team, these requirements need to be maintained as a structured set of obligations rather than as isolated regulatory references. Each obligation should identify the applicable fund or entity, the relevant requirement, the responsible owner, the activity or control required, the applicable frequency or deadline, and the documentation required to demonstrate completion.
This becomes particularly relevant where regulatory requirements are revised or new reporting requirements are introduced. SEBI revised the AIF regulatory reporting framework in March 2026, and the subsequent Master Circular incorporated the updated reporting requirements.
The framework should also provide a consistent method for recording compliance status and exceptions. Overdue activities, incomplete submissions, control deficiencies, and open remediation items should remain linked to the underlying regulatory requirement and retain their supporting evidence. This gives the Compliance Officer a consolidated view of outstanding obligations and provides a documented basis for periodic compliance reviews, management reporting, audits, and regulatory examinations.
AIF Compliance Requirements for Fund Managers
The compliance responsibilities of an AIF manager extend across the regulatory requirements that apply to the fund, its schemes, and the manager’s activities.
SEBI’s Compliance Test Report provides a useful illustration of the breadth of these responsibilities. The prescribed annual testing covers areas including information submitted to SEBI, material changes to the fund strategy, scheme corpus requirements, minimum investment requirements for new investors, and the continuing interest maintained by the Manager or Sponsor.
The Master Circular also sets out recurring reporting requirements for AIFs, making regulatory reporting an integral part of the compliance function.
These requirements sit alongside other obligations that have been introduced or modified through SEBI’s recent AIF regulatory framework. In 2026, SEBI issued requirements covering reporting of AIF unit values to depositories and revised the regulatory reporting framework for AIFs.
The current framework also incorporates the certification requirement for Compliance Officers of AIF Managers and subsequent changes to the AIF regulatory regime.
For an AIF compliance team, the practical implication is a compliance calendar that reflects specific regulatory tests, reporting obligations, applicability conditions, responsible owners, evidence requirements, and review points. Each requirement needs to remain traceable to the relevant regulatory provision and to the activity through which the AIF demonstrates compliance.
This is particularly important where requirements change over time, since the compliance record needs to reflect the regulatory position applicable during the relevant reporting or assessment period.
The Compliance Test Report and Ongoing AIF Compliance
The Compliance Test Report (CTR) provides a defined annual mechanism for assessing compliance with key provisions applicable to an AIF. The prescribed format requires the compliance officer to record the details of compliance and comments against specific regulatory tests.
These include whether information previously submitted to SEBI has undergone any material change, whether there has been a material alteration to the fund strategy and the required consent has been obtained, whether each scheme maintains the prescribed corpus, whether new investors meet the applicable minimum investment requirement, and whether the Manager or Sponsor maintains the required continuing interest in the AIF.
The CTR therefore brings together requirements that may originate in different parts of the AIF regulatory framework and places them within a defined compliance review. The underlying information may sit with different teams across the fund manager, making ownership, supporting documentation, review procedures, and timely escalation important components of the process.
The June 2026 Master Circular also requires the CTR to identify the compliance officer and the AIF for the relevant year, providing a formal record of the compliance assessment.
For compliance teams, the CTR can serve as one component of a broader compliance management process in which individual regulatory requirements are monitored throughout the year, supporting evidence is retained, exceptions are recorded, and the information required for periodic reporting and annual testing remains available when the review is performed.
This becomes increasingly relevant as SEBI continues to update the AIF framework, with the AIF Regulations last amended in July 2026 and further regulatory changes introduced during 2026.
AIF Regulatory Reporting and Compliance Deadlines
Regulatory reporting is a recurring component of AIF compliance and has become more structured under SEBI’s revised reporting framework. Under the June 2026 Master Circular, all AIFs are required to submit a Quarterly Activity Report through the SEBI Intermediary Portal within 15 calendar days from the end of each quarter.
The first quarterly report applies to the quarter ending June 2026. A separate quarterly submission is not required for the March quarter because the Annual Activity Report incorporates the relevant quarterly data. The Annual Activity Report is required at the end of each financial year and must be submitted within 30 calendar days from the end of March.
The reporting framework is designed to evolve with changes in the AIF industry and regulatory requirements. SEBI’s March 2026 circular revised the regulatory reporting framework to incorporate changes to the AIF Regulations and related circulars, while the Master Circular provides for periodic review of the reporting format. Revised formats are to be made available at least one month before the end of the relevant quarter.
The reporting calendar also needs to be considered alongside the Compliance Test Report, which the manager of an AIF is required to prepare at the end of each financial year and submit within 30 days from the financial year-end.
Chapter 21 of the Master Circular also covers other compliance-related reporting and documentation requirements, including audit of the terms of the placement memorandum, changes to the placement memorandum, and reporting of AIF investments under custody.
For compliance teams, these requirements create a recurring calendar of regulatory submissions, annual testing, supporting reviews, and evidence requirements. Maintaining the relevant data and documentation throughout the reporting period allows the team to prepare submissions within the prescribed timelines and retain a clear record of the basis for each reported position.
This is particularly relevant in the current environment, where SEBI’s AIF framework continues to be updated through new circulars and regulatory amendments.
| Compliance requirement | Frequency | Deadline / timeline |
|---|---|---|
| Quarterly Activity Report | Quarterly | Within 15 calendar days from the end of each quarter |
| Annual Activity Report | Annual | Within 30 calendar days from the end of March |
| Compliance Test Report (CTR) | Annual | Within 30 days from the end of the financial year |
| PPM audit | As applicable | As prescribed under the AIF framework |
| PPM changes / reporting | As applicable | Based on the nature of the change and applicable SEBI requirements |
| Custody-related reporting | As applicable | In accordance with applicable AIF custody requirements |
Managing Regulatory Changes and Compliance Reviews
The AIF regulatory framework has undergone several changes during 2026. SEBI issued a revised regulatory reporting framework in March, introduced requirements for reporting AIF unit values to depositories in February, operationalised a fast-track mechanism for processing AIF placement memorandums in April, and issued a new Master Circular for AIFs in June. The AIF Regulations were subsequently amended again in July 2026.
For an AIF compliance function, a regulatory change therefore requires an assessment of its impact on existing compliance processes. A change may affect a reporting obligation, the information required from a fund or manager, an existing control, a disclosure, a compliance test, or the documentation maintained as evidence.
The compliance team needs to identify the affected requirements, determine which funds or schemes are within scope, assign the resulting actions to the appropriate owners, and establish the effective date and review requirements.
The Compliance Test Report provides an important review point within this framework. The annual testing process covers specific requirements under the AIF regulations and requires the compliance officer to record compliance and relevant comments. Maintaining the underlying compliance activities, approvals, records, and supporting evidence throughout the year gives the compliance team a documented basis for completing these reviews and identifying exceptions requiring attention.
A structured regulatory change process also helps maintain the relationship between the current regulatory position and the compliance activities performed by the organization. When SEBI introduces or modifies a requirement, the corresponding obligation, control, activity, owner, deadline, and evidence requirement can be reviewed and updated.
This creates a current compliance record that reflects the regulatory framework applicable to the fund rather than relying on periodic manual reviews of regulatory circulars.
Managing Compliance Across Multiple AIFs and Schemes
AIF managers often oversee multiple funds and schemes, with requirements applying differently depending on the fund structure, investment strategy, investor profile, and regulatory circumstances. SEBI’s current framework places obligations across the AIF, its manager, sponsor, investment committee, and trustee, with the Compliance Officer responsible for monitoring compliance with applicable SEBI requirements.
For a compliance team, four areas require particular attention:
| Area | What needs to be managed |
|---|---|
| Applicability | Identify which regulatory requirements apply to each AIF, scheme, manager, activity, or investor category. |
| Ownership | Assign each obligation and compliance activity to the appropriate owner across compliance, investment, finance, operations, legal, and other functions. |
| Frequency and deadlines | Track recurring reporting, annual compliance testing, periodic reviews, and event-driven requirements against the relevant fund or scheme. |
| Evidence and exceptions | Maintain supporting documentation, record exceptions, and track remediation against the underlying compliance requirement. |
The need for this level of structure increases as the number of funds and schemes grows. A single regulatory change may affect several schemes differently, while a reporting requirement may require information from multiple functions before a submission can be completed. A fund-level compliance view therefore needs to coexist with consolidated management visibility across the wider AIF portfolio.
SEBI’s 2026 regulatory activity illustrates this continuing need for fund-level monitoring. The current framework includes the June 2026 Master Circular, the revised regulatory reporting framework, subsequent amendments to the AIF Regulations, and additional requirements introduced during the year.
What an AIF Compliance Management System Should Track
A structured AIF compliance management system should provide a complete record of the requirements applicable to each fund and scheme, the activities required to fulfil those requirements, and the evidence supporting completion. For a Compliance Officer, the objective is to maintain a current view of compliance across the organization while retaining the underlying records required for reviews, reporting, and regulatory examinations.
| Area | What the system should track |
|---|---|
| Regulatory requirements | Applicable SEBI regulations, circulars, master circular requirements, and subsequent regulatory changes |
| Obligations and applicability | The specific obligation, applicable AIF or scheme, relevant function, and conditions determining applicability |
| Controls and activities | Controls, compliance tests, filings, reviews, approvals, assessments, and other activities required to fulfil each obligation |
| Ownership and deadlines | Responsible owner, function, frequency, due date, review requirements, and escalation status |
| Evidence and audit trail | Supporting documents, filings, approvals, test results, correspondence, and records demonstrating completion |
| Exceptions and remediation | Compliance gaps, overdue activities, findings, corrective actions, assigned owners, and closure status |
| Reporting and dashboards | Compliance status across funds and schemes, upcoming obligations, overdue items, open gaps, regulatory changes, and management-level reporting |
The value of this structure lies in the relationship between these records. A regulatory requirement should remain connected to the obligation it creates, the control or activity performed, the person responsible, and the evidence produced. When a requirement changes, the affected obligations and activities can be identified and reviewed. When an activity is due, its owner and supporting evidence are already defined. When management or a regulator requires information, the compliance position can be traced back to the underlying records.
This provides the foundation for a more consistent AIF compliance operating model, particularly for managers overseeing multiple funds or schemes and dealing with a regulatory framework that continues to evolve.
How eQomply Supports AIF Compliance
eQomply provides a structured compliance management layer for AIF managers to manage regulatory requirements, obligations, controls, activities, ownership, evidence, and reporting in one system. AIF-specific requirements can be mapped to the relevant funds, schemes, functions, and responsible owners, with recurring compliance activities tracked against defined frequencies and deadlines.
Compliance teams can maintain supporting evidence against individual activities and obligations, record exceptions and remediation actions, and retain an audit trail of compliance reviews. Regulatory changes can also be assessed against existing requirements and workflows, helping teams identify affected obligations and update their compliance processes as the regulatory framework evolves.
For managers overseeing multiple AIFs or schemes, eQomply provides both fund-level and consolidated visibility into compliance status, upcoming activities, overdue obligations, open gaps, and evidence readiness. This gives Compliance Officers a current view of the organization’s regulatory position while retaining the underlying records required for management reporting, audits, and regulatory reviews. See eQomply in Action
