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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

Under the SEBI Alternative Investment Funds Regulations, which category of AIF is described as funds that invest in start-ups, early-stage ventures, social ventures, SMEs or sectors the government considers socially or economically desirable, and that receive incentives?

Category I AIF is the correct category. It covers venture capital, SME, social venture and infrastructure funds that invest in start-ups and sectors considered socially or economically desirable and that the government or regulators may incentivise. Category II and III serve different strategies.

  1. ACategory I AIFCorrect
  2. BCategory II AIF
  3. CCategory III AIF
  4. DMutual fund hybrid category

Explanation

Category I AIFs cover venture capital, SME, social venture and infrastructure funds, which have positive spillover effects on the economy. Category II covers funds such as private equity and debt funds that do not fall in I or III and do not undertake leverage beyond day-to-day operations. Category III uses complex trading strategies and may use leverage.

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