AIFs seek reversal of Sebi’s pro-rata rules citing implementation hurdles

Alternative Investment Funds (AIFs) have submitted multiple representations to Sebi seeking a rollback of pro-rata rules introduced in 2024 that require investor participation and distributions to be tied to commitments rather than investable capital. Industry executives argue the framework undermines fee economics negotiated by large investors, restricts drawdown flexibility, and could deter sizeable commitments critical to private-market fundraising. Sebi had released a consultation paper in November 2025, but fund managers say the proposal failed to address core concerns.