Current Affairs · Financial Regulations
With reference to the Securities and Exchange Board of India's (SEBI) circular on Alternative Investment Funds (AIFs), which of the following best explains the conceptual necessity for mandating standardized Net Asset Value (NAV) reporting to depositories?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To harmonize the operational disclosures by explicitly mandating both close-ended and open-ended funds to calculate and report their NAV to investors on a strict monthly basis.
- 2To eliminate regulatory reliance on AIF managers by shifting the entire compliance burden of calculating NAV directly to independent valuation entities.
- 3To reduce operational costs for Category I and Category II AIFs by mandating depositories to independently calculate their investment value.
- 4To address historical variance in valuation practices that limited market visibility, thereby establishing a uniform NAV reporting framework that enhances transparency and investor protection.✓
Correct answer
To address historical variance in valuation practices that limited market visibility, thereby establishing a uniform NAV reporting framework that enhances transparency and investor protection.
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