Sebi Extends Liquidation Timeline for Venture Capital Transition

The Securities and Exchange Board of India (Sebi) has announced a one-year extension to the liquidation timeline for venture capital funds (VCFs) transitioning to alternative investment fund (AIF) regulations. This extension, pushing the deadline to July 2026, aims to facilitate a smoother migration process for VCFs.

Initially, Sebi had laid out guidelines for VCFs in August 2024, granting them until July 19, 2025, to wind up their schemes if they decided to migrate to AIF rules. However, based on feedback from industry stakeholders, the regulator has reconsidered the timeline, offering additional time for transition.

VCFs that migrate will be classified as Category I AIFs, with existing investors and investments maintained under new regulations. To proceed with migration, VCFs must submit original registration documentation as per Sebi's requirements. The extension aims to provide ample time for VCFs to adapt to the new regulatory framework smoothly.

(With inputs from agencies.)