Sebi extends timeline of additional liquidation period for VCFs migrating to AIF rules

Markets regulator Sebi on Friday extended the additional liquidation timeline by one year till July 2026 for venture capital funds (VCFs) transitioning to alternative investment funds rules.

Sebi, in August 2024, issued modalities and conditions for VCFs to migrate to the Alternative Investment Funds (AIFs) rules. This also allowed VCFs, with at least one scheme not yet wound up after the end of their liquidation period, an additional liquidation period until July 19, 2025, if they migrate to AIF Regulations.

Based on industry feedback and to facilitate migration, Sebi has now extended this additional liquidation period to July 19, 2026, according to a circular issued on Friday.

A 'Migrated VCF' is a VCF that transitions to become a sub-category of VCF under Category I - Alternative Investment Fund as per the AIF norms.

The market watchdog reiterated that VCFs' transition to AIF regulations are given an additional liquidation period till July 19, 2025.

On application requirements, Sebi had stated that VCFs wishing to migrate must submit their original registration certificate and specific information as outlined by the regulator.

Sebi had stated that after migration, existing investors, investments, and units will be transferred under the AIF Regulations without change.