Angel Funds Get Time Till January 2026 to Disclose Investment Allocation Methodology: SEBI

The Securities and Exchange Board of India (SEBI) has granted additional time to Angel Funds for compliance with the new disclosure requirements related to allocation methodology, extending the deadline from October 15, 2025, to January 31, 2026. The market regulator announced the relaxation on Wednesday in response to industry representations seeking more time to align with the revised regulatory framework under the Alternative Investment Funds (AIF) regime.

The relaxation comes after SEBI’s notification on September 9, 2025, which amended the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 to introduce a revised framework for Angel Funds. This was followed by a detailed circular on September 10, 2025, outlining the operational modalities and specific compliance requirements for such funds.

Under paragraph 8.3 of that circular, existing Angel Funds were required to disclose a defined methodology in their private placement memorandums (PPMs) for allocating investments among participating angel investors. The circular also mandated that any investment made by such funds after October 15, 2025, should adhere strictly to this disclosed methodology.

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However, several AIF industry participants sought an extension, citing the need for more time to finalize, standardize, and communicate allocation frameworks that ensure fairness and transparency among investors. Considering these representations, SEBI has now allowed a grace period until January 31, 2026.

Accordingly, any investment made by existing Angel Funds after January 31, 2026, must conform to the defined allocation methodology as disclosed in their respective PPMs.

“Based on representation from the AIF industry requesting additional time to meet this requirement, it has been decided to extend the said timeline to January 31, 2026, for ease of compliance. Accordingly, allocation of any investment made by existing Angel Funds post January 31, 2026, shall be in accordance with the defined allocation methodology disclosed in their PPMs,” the circular read.

Speaking on the development, Rajat Tandon, President, IVCA said the extension underscores SEBI’s commitment to a pragmatic regulatory transition that not only strengthens transparency and investor protection but also acknowledges the operational challenges faced by angel fund managers.

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“It gives the ecosystem the necessary time to adapt processes, align investor communication, and embed governance standards in a sustainable manner. We at IVCA welcomes, this as a constructive step forward that will help Angel Funds integrate the new framework comprehensively and with confidence, while continuing to play a pivotal role in nurturing India’s start-up economy,” Tandon said.