SEBI eases AIF winding-up rules, approves net settlement for FPI transactions

The Securities and Exchange Board of India on Monday approved a series of regulatory amendments designed to provide Alternative Investment Funds (AIFs) with greater flexibility during the winding-up process and to reduce the compliance burden on funds that are no longer actively managed.

- AGENCIES

The proposed solutions include permitting the retention of liquidation proceeds under specific conditions, such as pending litigation or tax demands, and introducing a framework to tag certain entities as inoperative funds to exempt them from standard reporting requirements.

The decisions were detailed by SEBI Chairperson Tuhin Kanta Pandey during an address following the 213th board meeting held in Mumbai on Monday. Under the new framework, AIFs can retain proceeds beyond their permissible fund life if they can show “demonstrable receipt of a litigation notice or tax/regulatory demand” or if they secure “consent of at least 75% of investors by value” to satisfy anticipated liabilities.