SEBI Announces Settlement Scheme For Venture Capital Funds From 21 July
Offers an opportunity to settle matters by 19 July
By: : Suraj Sinha
Update: 2025-07-15 16:00 GMT
SEBI Announces Settlement Scheme For Venture Capital Funds From 21 July
Offers an opportunity to settle matters by 19 July
The Securities and Exchange Board of India (SEBI) has launched a settlement scheme, which begins on 21 July 2025, to aid Venture Capital Funds (VCFs) for resolving violations of winding-up provisions upon migration.
The scheme that ends on 19 January 2026, offers an opportunity to VCFs (with expired liquidation periods) to settle matters. Failing to do so by 19 July 2025, SEBI will take action against them.
The statement of the market regulator read: "The VCF Settlement Scheme 2025 has been proposed to provide an opportunity to VCFs to settle actions arising out of schemes whose liquidation periods have expired but not wound up and that continue to hold the unliquidated investments, and have completed the migration.”
While the VCF Regulations were repealed after the notification of the AIF Regulations in May 2012, some VCFs were unable to liquidate their investments during the fund’s tenure. They still hold the unliquidated investments.
On representations from VCFs on the difficulties faced, the AIF Regulations allowed migration to the AIF regime, while suggesting modalities. They have one year to liquidate their investments and wind up the schemes.
Thereafter, the VCFs could enter a dissolution period after obtaining approval from their investors. The last date for applying for migration is 19 July 2025.