Modalities for migration of Venture Capital Funds registered under erstwhile SEBI (Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds) Regulations, 2012
Summary
This circular establishes the modalities for Venture Capital Funds (VCFs) registered under the 1996 Regulations to migrate to the SEBI Alternative Investment Fund Regulations, 2012. It defines 'Migrated Venture Capital Fund' and outlines specific application requirements, including submission of registration certificates and prescribed formats. The document details tenure determinations, liquidation period extensions, and compliance obligations for both migrating and non-migrating VCFs. This section of the application form requests detailed information regarding the venture capital fund's corporate structure, key personnel including trustees, sponsors, and managers. It further requires specific financial and operational data for each scheme of the VCF, such as tenure, investments, and investor commitments. The part concludes with a declaration statement where the applicant affirms the truthfulness of the information and agrees to comply with SEBI regulations. This annexure details the applicability of various chapters from the SEBI Master Circular for AIFs to Migrated Venture Capital Funds (VCFs). It categorizes each chapter as either fully applicable, not applicable, or partially
Text
AIF Regulations were amended on July 20, 2024, to provide flexibility to VCFs for migrating to AIF Regulations and avail facility of dealing with unliquidated investments upon expiry of tenure.
Migrated Venture Capital Fund means a fund previously registered as a VCF under VCF Regulations and subsequently registered under AIF Regulations as a sub-category of Venture Capital Fund under Category I.
An application for seeking registration as a Migrated Venture Capital Fund shall be made to SEBI along with the original certificate of registration issued under VCF Regulations and requisite information as per Annexure I.
The facility of migration to AIF Regulations shall be available till July 19, 2025.
In case a definite tenure was disclosed in the Private Placement Memorandum (PPM) of the scheme(s) under the VCF Regulations, such scheme(s) shall continue with the same tenure upon migration.
In case a definite tenure was not disclosed in the PPM, the residual tenure shall be determined prior to the application for migration with the approval of 75 percent of investors by value of their investment.
VCFs having at least one scheme which has not been wound up post expiry of its liquidation period may apply for registration as Migrated VCF on or before July 19, 2025, only if there are no pending investor complaints regarding non-receipt of funds/securities.
A one-time additional liquidation period of one year from the date of notification of amendment to AIF Regulation (till July 19, 2025) shall be available to schemes whose liquidation period has expired and is not wound up.
Upon migration, the investors on-boarded, investments held and units issued by the VCF or scheme(s) registered under VCF Regulations shall be deemed to be that of the Migrated VCF or its scheme(s) under the AIF Regulations.
Scheme(s) of VCFs not opting for migration, whose liquidation period has not expired, shall be subject to enhanced regulatory reporting as may be prescribed by SEBI in line with regulatory reporting applicable to AIFs.
VCFs having at least one scheme whose liquidation period has expired and not opting for migration shall be subject to appropriate regulatory action for continuing beyond the expiry of their original liquidation period.
The flexibility to opt for migration shall not be available to VCFs wherein all schemes have been wound up or no investment has been made by schemes which have not been wound up.
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Source: SecMarx — Modalities for migration of Venture Capital Funds registered under erstwhile SEBI (Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds) Regulations, 2012. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.