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In a consultation paper, SEBI has proposed that Cat III AIFs will have to disclose their NAV to investors on a regular basis.
While close end Cat III AIFs will have to disclose their NAV on a quarterly basis, AIFs with open end structure will disclose it on a monthly basis, proposed SEBI.
SEBI said, “For Category III AIFs, under the section “Determination of the Net Asset Value of the Units”, AIF shall disclose the principles that will be used by the manager for the determination of the net asset value of units of the fund/scheme and may inter alia include details of the entity to be appointed as the valuer of the fund/scheme, valuation policy of the fund/scheme w.r.t general principles of valuation, exceptions and deviations from the valuation policy, asset class wise allocation of valuation methodology, valuation committee of the fund/scheme (if applicable) and any other guiding principles relevant for the investors to know in relation to the valuation policy.”
Apart from NAV, all category of AIFs – Cat I, II and III will have to describe their valuation methodology for valuing their assets to investors through private placement memorandums (PPMs). Further, AIFs will have to maintain records of their valuation policies and practices.
In these disclosures, AIFs will have to disclose details of entity which is valuing scheme, frequency of the valuation of holding companies and valuation principles followed by AIFs.
SEBI said that AIFs can adopt valuation norms followed by mutual fund companies to arrive at valuation of their investment portfolio.
Further, AIFs will have to get their books of accounts audited through independent auditor annually.
SEBI has invited comments on this consultation paper latest by Jan 23.