SEBI Grants Extension for Disclosure of Allocation Methodology by Angel Funds
Circular Date: October 15, 2025
Reference: SEBI/HO/AFD/AFD-POD-1/P/CIR/2025/136
Source: SEBI (via official circular)
SEBI has issued a new circular, providing relief in the timeline for Angel Funds to disclose and adhere to an allocation methodology in their PPMs. The revision gives additional time to existing funds to align operations with the framework introduced earlier in September 2025.
Key Highlights of the Circular
1. Relaxation of Disclosure Deadline
Existing Angel Funds are now allowed until January 31, 2026 to define and disclose a fixed allocation methodology in their Private Placement Memorandum (PPM).
Only investments made after January 31, 2026 must strictly adhere to the disclosed methodology.
All other provisions from the earlier circular (SEBI / … / 2025/128) remain in effect.
2. Applicability & Transition Scope
The extension applies only to existing Angel Funds that were active prior to the September 2025 circular.
New Angel Funds set up post that circular must comply immediately with the allocation disclosure and investment rules.
This relief does not extend to other regulatory changes imposed in the September circular; those remain binding.
3. Interaction with the Earlier Angel Funds Framework
As a recap of the September 10, 2025 circular (SEBI/…/2025/128), the framework included:
Requirement of a fixed allocation methodology, without discretionary ad hoc allocations
Mandatory pro-rata rights in investments and distributions (with limited exceptions)
Caps on follow-on investments, lock-in periods, eligibility of investor types, etc.
This October circular only relaxes timing; it does not change the substance of those obligations.
Implications for Managers & Funds
Fund managers of existing Angel Funds must move quickly to finalize the allocation methodology and incorporate it into an updated PPM.
Systems, internal approvals, and disclosure documents should be updated well before January 31, 2026 to avoid non-compliance.
For any investment made after the deadline, strict adherence to the disclosed methodology will be mandatory.
Internal teams (legal, compliance, operations) should monitor and ensure full alignment ahead of the cut-off date.