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In a recent circular, SEBI has extended the time limit to hold AIF investment in physical form till July. The regulator has specified that any investment in AIFs on or after July 1, 2025 will have to be held only in demat form only, irrespective of whether it is made directly in the investee company or if it is acquired from another entity.
All investments made before July 1, 2025 are exempt from the requirement of being in demat form. The exceptions to this rule are if companies in which the investment is made has made it mandatory to issue securities in demat form and AIFs who exercise control over the investee company. For such investments, the time limit for converting their securities to demat form is October 31, 2025.
AIFs whose tenure ends on or before October 31, 2025 and AIFs who are currently on extended tenure are exempt from this rule.
This circular will come into effect immediately.
