In a bid to streamline regulatory issues, SEBI introduces the VCF Settlement Scheme 2025 from July 21, 2025, focusing on Venture Capital Funds (VCFs) transitioning to the Alternative Investment Fund (AIF) regime.
Background
SEBI’s AIF Regulations of May 2012 replaced VCF Regulations, leading to non-compliance issues as many VCFs held unliquidated investments past their tenure.
Significance of the Scheme
- Offers VCFs a chance to rectify past breaches without harsh actions.
- Protects investor interests in expired schemes awaiting closure.
- Enhances regulatory trust and eases compliance for transitioning funds.
Objectives of the VCF Settlement Scheme
- Resolve violations related to non-winding-up of VCFs.
- Align migrated VCFs with SEBI’s compliance norms.
- Facilitate investor exit from prolonged schemes.
- Encourage voluntary compliance and prevent enforcement actions.
Key Features of the Scheme
- Opening Date: July 21, 2025
- Closing Date: January 19, 2026
- Applicable to: VCFs migrated to AIF regime with expired liquidation period.
- Mandatory Requirement: Migration completed before July 19, 2025.
- Post-Deadline Action: SEBI may enforce actions against defaulting VCFs.
- Structured Path: Allows VCFs to wind up schemes with investor approval for dissolution period.
Key Takeaways for Competitive Exams
- SEBI’s VCF Settlement Scheme 2025 aims to address compliance issues for VCFs transitioning to AIF regime.
- The scheme protects investor interests and fosters regulatory trust.
- It provides a structured approach for VCFs to wind up schemes post-migration.
