Sebi Unveils VCF Settlement Scheme 2025 for Venture Capital Fund Liquidation

Sebi launches a VCF Settlement Scheme starting July 21 to address unsettled cases of Venture Capital Funds. The initiative enables funds with expired liquidation periods to migrate to the AIF regime, settle outstanding actions, and complete dissolution by January 19, 2026.

Sebi has introduced a VCF Settlement Scheme effective from July 21, aimed at resolving pending violations among Venture Capital Funds (VCFs) that have not wound up after their liquidation periods expired. The scheme concludes on January 19, 2026, and facilitates the transition to the Alternative Investment Funds (AIF) regime.

Sebi noted that under the VCF Settlement Scheme 2025, VCFs could settle unresolved actions and wind up schemes holding unliquidated investments. This move follows the repeal of the VCF Regulations post the 2012 AIF Regulations, addressing those VCFs still holding assets beyond their tenure.

The timeline allows VCFs until July 19, 2025, to apply for migration. Failing to do so may result in Sebi taking action against funds that have not participated in the scheme or settled their positions. This decision was backed by Sebi's board last month, highlighting the ongoing resolve to streamline fund liquidation regulations.

(With inputs from agencies.)