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

This change will reduce paperwork and save time for fund managers.

WHO ARE ACCREDITED INVESTORS?

Accredited investors are people or entities that meet certain income or net worth rules set by SEBI. They are considered financially smart. They can understand higher-risk investment products.

The number of accredited investors in India has grown sharply:

• April 2025:  649 accredited investors

• April 2026:  2,773 accredited investors

As per SEBI’s latest data, accredited investors held AIF investments worth about  ₹1.91 lakh crore . This is nearly  30% of all AIF investments .

HOW GARUDA COULD BENEFIT INDIA’S INVESTMENT MARKET

The GARUDA framework will bring several good changes:

1. Faster Capital Deployment  – Money reaches businesses quicker.

2. Ease of Doing Business  – Less waiting and less paperwork.

3. Support for Startup Ecosystem  – Startups get funds faster.

4. Increased Investor Confidence  – Quick and clear rules build trust.

SEBI WILL CONTINUE RISK MONITORING

Even though the process becomes faster, SEBI will still keep a close watch. The regulator plans to do  post facto scrutiny . This means checking scheme documents after they are launched, based on risk assessment.

If SEBI finds any disclosure violations or irregularities, it may take regulatory action against the concerned entities. So speed does not mean less safety.

ABOUT ALTERNATIVE INVESTMENT FUNDS (AIFs)

AIFs are private pools of money. They collect funds from investors and put them into assets other than regular stocks and bonds. In India, AIFs are divided into three categories:

AIFs have become very important for financing startups, infrastructure, and new businesses in India.

PUBLIC FEEDBACK OPEN TILL JUNE 1

SEBI has invited public comments on the GARUDA proposal. The last date to send feedback is  1 June 2026 . After reviewing the feedback, SEBI may