SEBI’s GARUDA Proposal: New Rule to Launch Investment Schemes in Just 10 Days

OVERVIEW

India’s market regulator, SEBI, has proposed a new system called GARUDA. It stands for Green-Channel: AIF Rollout Upon Document Acknowledgement. This rule will help Alternative Investment Funds (AIFs) launch their schemes faster. Right now, AIFs must wait 30 days after filing papers. Under GARUDA, eligible schemes can start in just 10 working days. This will make fundraising quicker and improve business ease. The public can share feedback on this proposal until 1 June 2026.

WHAT IS SEBI’S GARUDA MECHANISM?

SEBI is the Securities and Exchange Board of India. It watches over India’s financial markets. Recently, SEBI proposed a new framework called  GARUDA . The full name is  Green-Channel: AIF Rollout Upon Document Acknowledgement .

This framework is made to simplify and speed up the launch of AIF schemes.

Current rule:  AIFs must wait 30 days after filing their Placement Memorandum (PPM) with SEBI. Only then can they launch their schemes.

Proposed GARUDA rule:  Eligible AIF schemes can launch within just  10 working days  after filing. But there is a condition. If SEBI raises any objections during this review period, the launch may be delayed. Otherwise, it moves fast.

This change will help fund managers raise money more quickly. It will also make India’s investment ecosystem more efficient.

WHY DID SEBI INTRODUCE GARUDA?

The AIF industry in India has grown very fast in recent years. Here is the data from SEBI:

The regulator also shared more numbers (as of 31 December 2025):

• Total commitments raised by AIFs:  ₹15.74 lakh crore

• Net investments made via AIFs:  ₹6.45 lakh crore

With so much growth, SEBI felt the need to make the process faster. This will help money reach startups and businesses without long delays.

FASTER LAUNCH FOR ACCREDITED INVESTOR ONLY SCHEMES

One of the best parts of the proposal is for two types of schemes:

• Accredited Investor only (AI-only) schemes

• Angel Funds

Under the new framework:

• These schemes may  not need  a merchant banker to file the papers.

• Fund managers can directly submit the PPM to SEBI.

• The filing must include an undertaking (a formal promise) from the CEO and compliance officer.