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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)

Mr. Rohan Mehta, a 45-year-old businessman, is considering a closed-ended Category II AIF. Which statement about the tenure and listing of such a fund is correct?

Units of a close-ended AIF can be listed on a stock exchange only after the final closing of the scheme, and the minimum tradable lot is Rs 1 crore. Category II AIFs are close-ended with at least a three-year tenure.

  1. ACategory II AIFs must be open-ended with monthly redemption
  2. BUnits of AIFs cannot be listed on a stock exchange at all
  3. CUnits of a close-ended AIF may be listed only after final closing, subject to a minimum tradable lot of Rs 1 croreCorrect
  4. DCategory II AIFs must be wound up within one year

Explanation

Close-ended AIFs may list units on a recognised stock exchange after the final closing of the scheme, with a minimum tradable lot of Rs 1 crore. Category II AIFs are close-ended, with a minimum tenure of three years, so the other statements are wrong.

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