The Securities and Exchange Board of India (Sebi) has finalized guidelines for alternative investment funds (AIFs), allowing “excuse” and “exclude” provisions to coexist with a pro-rata distribution mandate. This mandate, introduced to ensure fair distribution based on investor commitments, raised concerns regarding its implications. The “excuse” provision lets investors opt out of certain deals, while “exclude” prevents participation in investments violating laws. The final regulations aim to clarify these provisions, especially regarding tax implications and distribution ratios, with restrictions on existing schemes favoring certain investors from raising new commitments. AIF commitments total Rs 11.78 trillion as of June.