SEBI Circular – Schemes of AIFs which have adopted priority in distribution among investors

SEBI has issued Circular dated November 23, 2022, directing to Schemes of AIFs which have adopted Priority Distribution Model, not to accept any fresh commitment or make investment in a new investee company, till a view is taken by SEBI in this regard.

Priority Distribution Model is nothing but schemes of AIFs that have adopted a distribution waterfall in such a way that one class of investors (other than sponsor/manager) share loss more than pro rata to their holding in the AIF vis-à-vis other classes of investors/unit holders, since the later has priority in distribution over former.

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