VCFs Settle Compliance Lapses with SEBI: A Look into the 2025 Settlement Scheme

Twenty-nine venture capital funds, including LICHFL Fund, settled regulatory violations with SEBI under a 2025 scheme designed to address compliance lapses. SEBI's scheme, concluded in January 2026, helped entities resolve enforcement proceedings over delayed liquidation of schemes, with settlement payments ranging from Rs 2 lakh to Rs 9.5 lakh.

In an effort to resolve long-standing compliance issues, twenty-nine venture capital funds, including notable names such as LICHFL Fund and True North Fund IV, have reached settlements with the Securities and Exchange Board of India (SEBI). The action was part of SEBI's venture capital funds (VCF) settlement scheme launched in 2025, aiming to address procedural lapses concerning the delayed liquidation of investments.

The settlement came after SEBI received applications from these funds to resolve enforcement proceedings by paying financial settlements, ranging from Rs 2 lakh to Rs 9.5 lakh. These funds were initially registered under the erstwhile 1996 VCF norms and had failed to liquidate their investments within the designated tenure, remaining operational beyond their expiry dates and thus breaching regulatory provisions.

SEBI's Whole Time Members, Kamlesh Chandra Varshney and Amarjeet Singh, noted that while the proceedings are settled, the regulator retains the right to take further action if there are misrepresentations or breaches of settlement terms. The scheme officially concluded in January 2026, while SEBI emphasized its commitment to compliance enforcement under the revised AIF regulations introduced in 2012.

(With inputs from agencies.)