SEBI Sets Forth Settlement Scheme For VCFs From 21 July
SEBI Sets Forth Settlement Scheme For VCFs From 21 July
Offers them an opportunity to settle matters by 19th of this month
The Securities and Exchange Board of India (SEBI) has introduced a settlement scheme beginning 21 July 2025, to aid Venture Capital Funds (VCFs) in resolving violations of winding-up provisions upon migration.
Ending on 19 January 2026, the scheme offers an opportunity to VCFs (with expired liquidation periods) to settle the matters. Failing to do so by 19 July 2025, SEBI will take action against them.
The market regulator’s statement read: "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.”
The VCF Regulations were repealed after the notification of the AIF Regulations in May 2012.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.
On receiving representations from VCFs on the difficulties faced, the AIF Regulations provided for migration to the AIF regime, while suggesting modalities. They have been provided 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 such migration is 19 July 2025.
