Securities and Exchange Board of India (Sebi), the market regulator, announced on Tuesday a scheme that will begin on July 21 to help migrated Venture Capital Funds (VCFs) settle violations of winding-up provisions. The scheme will end on January 19, 2026, according to a statement from the Sebi.
Key Highlights
- SEBI’s VCF Settlement Scheme opens July 21, 2025, allowing migrated VCFs to resolve liquidation delays until January 19, 2026.
- Participating VCFs face settlement fees from ₹1 lakh (first year) plus ₹50,000 per additional year, up to ₹6 lakh.
Sebi proposed the VCF Settlement Scheme 2025 to allow VCFs to settle actions related to schemes with expired liquidation periods but still holding unliquidated investments after completing the migration.
Sebi repealed the VCF Regulations following the notification of the Alternative Investment Funds (AIF) Regulations in May 2012. However, some VCFs were unable to liquidate their investments during the fund's tenure and continued to hold the unliquidated investments after it expired.
Given the representations received from VCFs about the difficulties they face in fully liquidating their investments during the tenure of their schemes and winding up, the AIF Regulations provided for the migration of such VCFs to the AIF regime, as well as the modalities for such migration.
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Furthermore, VCFs have been given an additional year to liquidate their investments and exit the schemes.
Once migrated, VCFs may enter a dissolution period after receiving approval from their investors. The application deadline for such migration is July 19, 2025, according to Sebi.
