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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, wants to invest in an AIF. He is told that the fund is close-ended with a stated tenure. Under the AIF Regulations, what is the minimum tenure of a Category I and Category II AIF?

Category I and Category II AIFs must have a minimum tenure of three years under the SEBI AIF Regulations. Category III funds can be open-ended, so this floor does not apply to them in the same way.

  1. A1 year
  2. B3 yearsCorrect
  3. C5 years
  4. D7 years

Explanation

Close-ended Category I and Category II AIFs must have a minimum tenure of three years. Category III funds may be open-ended or close-ended and have no such three-year floor. One year and five years are not the prescribed minimum, and seven is not a regulatory figure.

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