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Jun 17, 2026
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Sebi allows AIFs, venture capitals to retain fund beyond expiry
The Securities and Exchange Board of India (Sebi) on Tuesday issued a circular allowing alternative investment funds (AIFs) and venture capital funds to retain funds beyond fund life under specific circumstances.
This addresses bottlenecks where funds cannot close because of locked-up capital due to unfavourable circumstances such as disputes, tax claims, or ongoing wind-up costs. The circular, which comes into immediate effect, follows the regulator’s notification in April to provide such flexibilities to AIFs.
There are three conditions specified by the regulator for both AIFs and venture capital funds, of at least one needs to be met for retaining funds beyond expiry. These include providing demonstrable receipt of litigation notice or demand by the funds that indicates a potential tax, regulatory, or legal liability.
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