SEBI Offers Exit Route To Old Venture Funds Holding Unliquidated Assets

SEBI launches a settlement scheme offering relief to migrated venture capital funds facing winding-up violations. Funds must comply before the looming deadline to avoid regulatory action.

The scheme will end on January 19, 2026, the Securities and Exchange Board of India (Sebi) said in a statement.

Source : PTI

Markets regulator Sebi on Tuesday announced a scheme beginning July 21 to aid the settlement of violations of winding-up provisions by migrated Venture Capital Funds (VCFs).

The scheme will end on January 19, 2026, the Securities and Exchange Board of India (Sebi) said in a statement.

The VCF Settlement Scheme 2025 has been proposed to provide an opportunity to VCFs to settle actions arising out of having schemes whose liquidation periods have expired but not wound up and that continue to hold the unliquidated investments, and have completed the migration, Sebi said.

Sebi had repealed the VCF Regulations after the notification of the Alternative Investment Funds (AIF) Regulations in May 2012.

However, some VCFs were unable to liquidate their investments during the tenure of the fund and continue to hold the unliquidated investments beyond the expiry of their tenure.

Considering the representations received from VCFs regarding difficulties faced in fully liquidating their investments during the tenure of their schemes and wind up, the AIF Regulations provided for migration of such VCFs to the AIF regime, and also prescribed the modalities for such migration.

Moreover, VCFs have been provided an additional period of one year to liquidate their investments and wind up the schemes.

Once migrated, VCFs could also enter into a dissolution period after obtaining approval from their investors. The last date for applying for such migration is July 19, 2025, Sebi said.

Upon expiry of the last date of migration, i.e. July 19, 2025, Sebi may initiate action against such VCFs that have schemes whose liquidation period has expired but not wound up and that continue to hold the unliquidated investments, and have not availed the opportunity under the VCF Settlement Scheme, 2025," it added.

Last month, the board of Sebi approved a proposal regarding the settlement scheme. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)