According to the SEBI circular dated August 2024, a migrated venture capital fund will be considered an Type 1 AIF.
Indian Venture Capitalist Association (IVCA) directed venture capitalists who have not migrated to AIF framework, to do so before the SEBI deadline of July 19, 2025, according to a statement.
“Despite the regulatory clarity and incentives provided under this framework—including a simplified re-registration process, fee waivers, and tailored compliance requirements— the response to the said scheme is understood to be tepid. This low uptake is a cause for concern,” IVCA said in its statement. According to the SEBI circular dated August 2024, a migrated venture capital fund will be considered an Type 1 AIF.
“The old VCF (Venture Capital Fund) guidelines were existing even in the late 1990s, and in 2012, the AIF regulations were introduced. Every fund has a limited life of generally 8-10 years. There are a lot of VC funds registered with SEBI. And as of date, many of the VCs while their tenure has got over, have not completed their winding up and termination process via-a-vis erstwhile VCF regulation of SEBI,” said Rahul Shah, Executive Vice President of IVCA. ”
He further added that the members of IVCA felt that the July 19 deadline was too quick for them to comply and that they’d prefer liquidating the VC funds first before migrating.” He further added that the VC fund managers were of the view that they rather than make efforts liquidating the current investments in the fund by the given deadline and then apply for migration, the IVCA was pushing them to complete the migration process before the deadline.
Published – May 30, 2025 10:55 pm IST
