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SEBI Approves Amendments to AIF Regulations – Retention of Liquidation Proceeds Beyond Fund Tenure April 2, 2026
Published in: Alerts
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The Securities and Exchange Board of India, in its board meeting dated March 23, 2026, has approved amendments to the SEBI (Alternative Investment Funds) Regulations, 2012 to permit AIFs to retain liquidation proceeds beyond the expiry of their tenure under specified conditions.
Under the revised framework, AIFs may retain funds where there are pending or anticipated litigation or tax liabilities, subject to investor consent or demonstrable regulatory or operational requirements. The amendments also introduce the concept of ‘inoperative funds’, allowing AIFs to surrender registration while retaining funds, with proportionately reduced compliance obligations compared to active funds.
The changes aim to address practical challenges faced by AIFs in achieving complete liquidation within prescribed timelines, while balancing regulatory oversight with ease of doing business.
Click here to read the press release: https://lnkd.in/gXHWkAbV
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