India's SEBI eases Alternative Investment Fund (AIF) winding-up rules, allows retention of proceeds
Change
India's SEBI allowed Alternative Investment Funds to retain liquidation proceeds beyond their prescribed fund life when facing unresolved litigation or tax notices, provided at least 75% of investors by value consent or retained amounts are substantiated, with operational-cost retention capped at three years.
Why it matters
Wind-downs can no longer be completed solely by distributing all proceeds and surrendering registration; administrators must follow an exception-based process that preserves proceeds only under documented approvals or evidence. Funds designated as 'inoperative' will face reduced periodic filing duties but will remain registered and subject to regulatory oversight, extending the administrative timeline for final closure.
Implications
- • Alternative Investment Fund managers' compliance teams must secure documented consent from investors representing at least 75% by value before retaining liquidation proceeds or proceed to distribute funds and complete deregistration.
- • Alternative Investment Fund managers' finance teams must retain and produce substantiation for any amounts held and must distribute remaining balances when operational-cost retention reaches three years from the fund's life end.
Unlock the decision layer.
Go beyond headlines — see impact, exposure, and timing.
- Implications: What actually changes downstream.
- Who is affected: Which teams or operators are exposed.
- What to watch: Deadlines, triggers, and next moves.
- Real-time alerts: Know the moment a change is published.
- Ask AI: Clarify any brief instantly, in context.
14-day free trial. Full access. No credit card required.
Start free trial
Source
Topics
Regulatory Actions Compliance Capital Markets Financial Services