SEBI allows AIFs to retain liquidation proceeds beyond fund life

Regulator permits extended wind-down timelines

Change
SEBI allowed Alternative Investment Funds to retain proceeds beyond fund life in specified cases such as litigation or tax liabilities.
Why it matters
Funds must follow conditional approval processes and may operate as ‘inoperative’ entities under continued regulatory oversight.
Implications
  • Fund managers must meet retention conditions — compliance complexity increases
  • Investors face delayed payouts — capital recovery timelines extend

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