#New Delhi

Sebi on Friday came out with a draft circular to clarify operational aspects of maintaining pro-rata and pari-passu rights of investors in alternative investment funds (AIFs).

Pro-rata generally means investors share profits or returns in proportion to their investment, while pari-passu means all investors are treated equally, with no one getting special preference. In its draft, Sebi proposed that for closed-ended AIF schemes, investor rights should be based on either their total commitment while distributing investment proceeds. The regulator said schemes should clearly disclose upfront how pro-rata rights are calculated and cannot change this method during their tenure. PTI

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