SEBI AIF Amendments: Social Impact Fund Minimum Cut to ₹1,000
Why in the news
SEBI notified changes to the Alternative Investment Fund rules so small investors can back non-profits through Social Impact Funds, widening participation in the Social Stock Exchange (SSE).
Key facts
- Minimum individual investment in a Social Impact Fund (SIF): from ₹2 lakh to ₹1,000.
- Effect: SIFs move from a high-net-worth product to a mass-market one.
- The size now matches ZCZP instruments.
- AIFs holding no funds after their tenure ends can ask for “inoperative” status, under prescribed norms.
| Change | Before | After |
|---|---|---|
| Minimum for individuals in SIF | ₹2 lakh | ₹1,000 |
| AIF with no funds after tenure | Full compliance continued | May seek inoperative status |
Background
- Social Impact Fund: a sub-category of Category I AIFs, investing in social enterprises or NPOs listed or registered on the SSE; aims at measurable social or environmental impact plus modest returns.
- ZCZP: instrument used by NPOs; no interest and no principal returned, so effectively a transparent donation.
- Inoperative status lowers compliance load for funds that have already liquidated and paid out investors.
Exam angle
- Regulator: SEBI; new minimum ₹1,000 (earlier ₹2 lakh).
- SIF falls under Category I AIF.
- Related terms: SSE, NPO, ZCZP, AIF. Relevant for SEBI Grade A and RBI Grade B.