SEBI Eyes AIF Boost: Relaxing Debt Investment Rules on the Horizon

SEBI is considering relaxing debt investment norms for Category II Alternative Investment Funds (AIFs), potentially allowing them to invest in listed debt securities rated 'A' or below. This aims to address concerns over shrinking unlisted debt options post-LODR amendments. The proposal allows AIFs to allocate over 50% of funds to either unlisted securities or lower-rated listed debt. With 192 schemes already heavily invested in unlisted debt, this move could significantly expand AIF investment opportunities. Public comments are invited until February 28, 2025.

Source: SEBI Consultation Paper