SEBI/HO/AFD/AFD -POD -1/P/CIR/2024/111

circulars · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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CIRCULAR SEBI/HO/AFD/AFD -POD -1/P/CIR/2024/111 To, All Alternative Investment Funds (AIFs) All Venture Capital Funds registered under the erstwhile SEBI (Venture Capital Funds) Regulations, 1996 (VCFs) Sir/Madam, Sub: Modalities for migration of Venture Capital Funds registered under erstwhile SEBI (Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds) Regulations, 2012 Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations " ) have been amended and notified on July 20, 2024 , to provide flexibility to Venture Capital Funds ('VCFs') registered under the erstwhile SEBI (Venture Capital Funds) Regulations, 1996 ("VCF Regulations"), for migrating to AIF Regulations and to , inter -alia , avail the facility of dealing with unliquidated investments of their schemes upon expiry of tenure. Copy of the aforesaid notification is available at link . In terms of Regulation 19V(1) of AIF Regulations, "Migrated Venture Capital Fund" means a fund that was previously registered as a Venture Capital Fund under the VCF Regulations and subsequently registered under AIF Regulations as a sub-category of Venture Capital Fund under Category I - Alternative Investment Fund, in accordance with the provisions of Chapter III - D of AIF Regulations. In terms of Regulation 19X(1) of AIF Regulations, an application for seeking registration as a Migrated Venture Capital Fund shall be made to SEBI in the manner specified by SEBI . In this regard, while applying to SEBI for migration to AIF Regulations as "Migrated VCFs", VCFs shall submit the following: 3.1. Original certificate of registration issued under VCF Regulations. 3.2. Requisite information as per the format specified in Annexure I . August 19, 2024 While opting f

Rule TOC

3 · 1. Original certificate of registration issued under VCF Regulations.

3 · 2. Requisite information as per the format specified in Annexure I .

4 · 1. The facility of migration to AIF Regulations shall be available till July 19, 2025.

4 · 2. The tenure of scheme(s) of the Migrated VCF, upon migration, shall be determined in the following manner:

4 · 2.1. In case a definite tenure was disclosed in the Private Placement Memorandum (PPM) of the scheme(s) under the VCF Regulations, such scheme(s) shall continue with the same tenure upon migration.

4 · 2.2. In case a definite tenure was not disclosed in the PPM of the scheme(s) , the residual tenure of the scheme(s) of the Migrated VCF shall be determined prior to the application for migration, with the approval of 75 percent of investors by value of their investment in the scheme(s) .

5 · 1. Such VCFs may apply for registration as Migrated VCF on or before July 19, 2025, only if the VCF or any of its scheme(s) do not have any pending investor complaint with regard to non-receipt of funds / securities as on the date of the application.

5 · 2. In terms of Regulation 19AF(4) of AIF Regulations, a one-time additional liquidation period of one year from the date of notification of amendment to AIF Regulation i.e., period till July 19, 2025 , shall be available to scheme of the migrated VCF, whose liquidation period (in terms of Regulation 24(2) of VCF Regulations) has expired and is not wound up .

5 · 3. If the VCF also has scheme(s) other than the scheme(s) stated in para 5.2. above, i.e., scheme(s) whose liquidation period (in terms of Regulation 24(2) of VCF Regulations) has not expired, the tenure of such scheme(s) of the Migrated VCF shall be determined as per provision at para 4.2 above upon migration .

8 · 1. Scheme(s) of VCFs , whose liquidation period (in terms of Regulation 24(2) of VCF Regulations) has not expired , shall be subject to enhanced regulatory reporting as may be prescribed by SEBI in line with the regulatory reporting applicable to AIFs under AIF Regulations.

8 · 2. VCFs having at least one scheme whose liquidation period (in terms of Regulation 24(2) of VCF Regulations) has expired shall be subject to appropriate regulatory action for continuing beyond the expiry of their original liquidation period .

9 · 1. All the schemes of the VCF have been wound up; and/or,

9 · 2. No investment has been made by schemes of the VCF which have not been wound up.