SEBI Extends Additional Liquidation Period for Migrating Venture Capital Funds to AIF Regulations [Read Circular]

This extension provides regulatory relief to VCFs operating under the erstwhile SEBI (Venture Capital Funds) Regulations, 1996, as they transition to the more contemporary SEBI (Alternative Investment Funds) Regulations, 2012.

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SEBI had earlier, through its circular dated August 19, 2024, laid down detailed modalities for the migration process. Specifically, Paragraph 5.2 of that circular allowed VCFs that had at least one scheme pending winding up despite the expiration of their liquidation period under Regulation 24(2) of the 1996 VCF Regulations, an additional liquidation window until July 19, 2025, provided they opted for migration to the AIF regulations.

After consulting with stakeholders and considering industry representations, SEBI has now extended this further liquidation term by an additional year. Consequently, such VCFs will have until July 19, 2026, to complete the liquidation process post-migration.

It is important to note that SEBI has made it clear that the deadline for applying for migration is still July 19, 2025, even though the liquidation time has been extended. The previous circular's other provisions are still in effect. The latest circular, which takes effect immediately.