The Securities and Exchange Board of India (Sebi) on Thursday has proposed that the valuation of unlisted securities held by Alternative Investment Funds (AIFs) be carried out as per the guidelines issued by the eligible industry association, and not as per Mutual Fund Regulations.

The AIF industry association has endorsed the International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines) for the proposed change. However, valuation of securities other than unlisted securities, non-traded, thinly-traded and those below investment grade, will continue to be done as per Mutual Fund (MF) regulations.

“There are fundamental differences between MFs and AIFs on holding and valuing their investment portfolio…it is felt that the ask of the AIF industry to the extent of exempting unlisted securities from the applicability of calculation norms under MF Regulations and opting for a methodology under IPEV guidelines, merits consideration,” S…