By putting money into listed and unlisted derivatives, Category III AIFs use a variety of trading tactics and leverage. They engage in arbitrage, futures, derivatives, and margin trading. Closed-ended and open-ended funds are both permitted in category III funds. They are not as rigorously regulated as conventional investments. As a result, they are not required frequently to publish their information. Also, there are no incentives or discounts offered by the Indian government for investing in these funds.
AIF Category III