NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)
Which of the following is a feature of Category III AIFs regarding their fund structure under SEBI AIF Regulations?
Category III AIFs may be either open-ended or close-ended. By contrast, Category I and II AIFs must be close-ended with a minimum tenure of three years, so Category III has greater structural flexibility.
- AThey can only be close-ended with a minimum tenure of three years
- BThey may be open-ended or close-endedCorrect
- CThey can only be open-ended
- DThey cannot be pooled investment vehicles
Explanation
Category III AIFs may be open-ended or close-ended. Category I and II AIFs must be close-ended, with a minimum tenure of three years. Thus options restricting Category III to only one structure are wrong.
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