CIRCULAR
SEBI/HO/AFD/AFD-POD-1/P/CIR/2024/111 August 19, 2024
To,
All Alternative Investment Funds (AIFs)
All Venture Capital Funds registered under the erstwhile SEBI (Venture Capital Funds)
Regulations, 1996 (VCFs)
Sir/Madam,
Sub: Modalities for migration of Venture Capital Funds registered under erstwhile SEBI
(Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds)
Regulations, 2012
1. Securities and Exchange Board of India (Alternative Investment Funds) Regulations,
2012 (“AIF Regulations”) have been amended and notified on July 20, 2024, to
provide flexibility to Venture Capital Funds (‘VCFs’) registered under the erstwhile
SEBI (Venture Capital Funds) Regulations, 1996 (“VCF Regulations”), for migrating to
AIF Regulations and to, inter-alia, avail the facility of dealing with unliquidated
investments of their schemes upon expiry of tenure. Copy of the aforesaid
notification is available at link.
2. In terms of Regulation 19V(1) of AIF Regulations, “Migrated Venture Capital Fund”
means a fund that was previously registered as a Venture Capital Fund under the VCF
Regulations and subsequently registered under AIF Regulations as a sub-category of
Venture Capital Fund under Category I - Alternative Investment Fund, in accordance
with the provisions of Chapter III - D of AIF Regulations.
3. In terms of Regulation 19X(1) of AIF Regulations, an application for seeking
registration as a Migrated Venture Capital Fund shall be made to SEBI in the manner
specified by SEBI. In this regard, while applying to SEBI for migration to AIF Regulations
as “Migrated VCFs”, VCFs shall submit the following:
3.1. Original certificate of registration issued under VCF Regulations.
3.2. Requisite information as per the format specified in Annexure I.
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4. While opting for migration to AIF Regulations, VCFs having only schemes whose
liquidation period (in terms of Regulation 24(2) of VCF Regulations) has not expired,
shall be subject to the following conditions -
4.1. The facility of migration to AIF Regulations shall be available till July 19, 2025.
4.2. The tenure of scheme(s) of the Migrated VCF, upon migration, shall be
determined in the following manner:
4.2.1. 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.
4.2.2. In case a definite tenure was not disclosed in the PPM of the scheme(s),
the residual tenure of the scheme(s) of the Migrated VCF shall be
determined prior to the application for migration, with the approval of
75 percent of investors by value of their investment in the scheme(s).
5. While opting for migration to AIF Regulations, VCFs having at least one scheme which
has not been wound up post expiry of its liquidation period (in terms of Regulation
24(2) of VCF Regulations), shall be subject to the following conditions –
5.1. Such VCFs may apply for registration as Migrated VCF on or before July 19,
2025, only if the VCF or any of its scheme(s) do not have any pending investor
complaint with regard to non-receipt of funds / securities as on the date of the
application.
5.2. In terms of Regulation 19AF(4) of AIF Regulations, a one-time additional
liquidation period of one year from the date of notification of amendment to
AIF Regulation i.e., period till July 19, 2025, shall be available to scheme of the
migrated VCF, whose liquidation period (in terms of Regulation 24(2) of VCF
Regulations) has expired and is not wound up.
5.3. If the VCF also has scheme(s) other than the scheme(s) stated in para 5.2.
above, i.e., scheme(s) whose liquidation period (in terms of Regulation 24(2) of
VCF Regulations) has not expired, the tenure of such scheme(s) of the Migrated
VCF shall be determined as per provision at para 4.2 above upon migration.
6. Upon migration to AIF Regulations, the investors on-boarded, investments held and
units issued by the VCF or scheme(s) of the VCF registered under VCF Regulations, shall
be deemed to be that of the Migrated VCF or its scheme(s), under the AIF Regulations.
7. The applicability of provisions of SEBI Master Circular for AIFs (Circular No.
SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/39 dated May 07, 2024) and other circulars
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issued subsequently under AIF Regulations, to Migrated VCFs are given at Annexure
II.
8. Further, with respect to VCFs registered under VCF Regulations that do not opt for
migration to AIF Regulations, the following is specified –
8.1. Scheme(s) of VCFs, whose liquidation period (in terms of Regulation 24(2) of
VCF Regulations) has not expired, shall be subject to enhanced regulatory
reporting as may be prescribed by SEBI in line with the regulatory reporting
applicable to AIFs under AIF Regulations.
8.2. VCFs having at least one scheme whose liquidation period (in terms of
Regulation 24(2) of VCF Regulations) has expired shall be subject to appropriate
regulatory action for continuing beyond the expiry of their original liquidation
period.
9. The flexibility to opt for migration to AIF Regulations shall not be available to VCFs
wherein –
9.1. All the schemes of the VCF have been wound up; and/or,
9.2. No investment has been made by schemes of the VCF which have not been
wound up.
Such VCFs shall submit an application to SEBI for surrender of their registration on or
before March 31, 2025, failing which appropriate action shall be initiated to cancel
the certification of registration.
10. The manager, trustee and key management personnel of the VCF/Migrated VCF and
manager shall be responsible for compliance with the provisions of this circular.
11. The trustee/ sponsor, as the case may be, shall ensure that the ‘Compliance Test
Report’ prepared by the manager in terms of Chapter 15 of SEBI Master Circular for
AIFs, includes compliance with the provisions of this circular.
12. This circular shall come to force with immediate effect.
13. This circular is issued with the approval of the competent authority.
14. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, read with Regulation 36, Regulation
39(2) of AIF Regulations and Regulations under Chapter III D of AIF Regulations, to
protect the interests of investors in securities and to promote the development of,
and to regulate the securities market.
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15. The circular is available on SEBI website at www.sebi.gov.in under the categories
"Legal framework - Circulars" and "Info for - Alternative Investment Funds”.
Yours faithfully,
Sanjay Singh Bhati
Deputy General Manager
Tel no.: +91-22-26449222
ssbhati@sebi.gov.in
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Annexure I
Information to be filed with SEBI by VCFs registered under VCF Regulations for the
purpose of migration to AIF Regulations as ‘Migrated VCFs’
Table 1 – Details with respect to VCF and its trustee/manager/sponsor, as applicable
Information as submitted by
S. No. Particulars
the applicant
General Information
1. Name of the applicant
2. PAN of applicant
3. Registration No. of the VCF
(Enclose the original certificate of registration
as a VCF)
4. Address of the Registered Office Address:
Tel No.:
Mobile No. :
Email ID:
5. Address of the applicant for Correspondence Address:
Tel No.:
Mobile No. :
Email ID:
6. Address of Principal Place of Business Address:
Tel No.:
Mobile No. :
Email ID:
7. Contact person Name:
Direct Line Number:
Mobile No.:
Email ID:
8. Legal structure of applicant -Whether the
applicant is a company or trust or a body
Page 5 of 16
Information as submitted by
S. No. Particulars
the applicant
corporate
9. Date and Place of incorporation/
establishment
(Enclose certificate of incorporation,
memorandum and articles of association or
trust deed in terms of which the VCF was
incorporated or established)
10. Name, Identity proof and address proof of the
Board of Directors of the venture capital fund
in case the applicant has been set up as a
company
11. Whether the applicant or its associates is/ are
registered with the Board, Reserve Bank of
India or any other regulatory authority in any
capacity along with the details of its
registration.
Details of trustee/trustee company
12. Whether the trustee is an individual or a
trustee company
13. Name of the Trustee
14. PAN of Trustee
15. Address of the registered office
16. Contact person of Trustee Name:
Direct Line Number:
Mobile No.:
Email ID:
17. Name, Identity and Address proof of Directors
of the Trustee Company(cid:13)
18. Whether the Trustee Company is registered
with Board, or any other regulatory authority
in any capacity along with the details of its
Page 6 of 16
Information as submitted by
S. No. Particulars
the applicant
registration
Details of sponsor(s)
19. Name of Sponsor
20. PAN of Sponsor
21. Address of the Registered Office Address:
Tel No.:
Mobile No. :
Email ID:
22. Address for Correspondence Address:
Tel No.:
Mobile No. :
Email ID:
23. Address of Principal Place of Business Address:
Tel No.:
Mobile No. :
Email ID:
24. Legal Structure and date of incorporation/
establishment of Sponsor
25. Contact person of Sponsor Name:
Mobile Number:
Email ID:
26. Name, Identity proof and address proof of
directors of the Sponsor or partners of the
Sponsor
27. Details of Shareholders / partners of the
Sponsor
28. Whether the Sponsor is registered with Board,
or any other regulatory authority in any
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Information as submitted by
S. No. Particulars
the applicant
capacity along with the details of its
registration
Details of Manager
29. Name of Manager
30. PAN of Manager
31. Address of the Manager
32. Address of the Registered Office Address:
Tel No.:
Mobile No. :
Email ID:
33. Address for Correspondence Address:
Tel No.:
Mobile No. :
Email ID:
34. Address of Principal Place of Business Address:
Tel No.:
Mobile No. :
Email ID:
35. Legal Structure and date of incorporation/
establishment of Manager
36. Contact person of Manager Name:
Direct Line No.:
Mobile Number:
Email ID:
37. Name, Identity proof and address proof of the
Directors of the Manager
38. Details of Shareholders / partners of the
Page 8 of 16
Information as submitted by
S. No. Particulars
the applicant
Manager
39. Whether the manager is registered with Board,
or any other regulatory authority in any
capacity along with the details of its
registration
Table 2 – Details pertaining to scheme of the VCF
(Information shall be submitted separately for each scheme of the VCF)
Information as submitted
S. No. Particulars
by the applicant
1. Copy of the placement memorandum
2. Date of initial closing of the scheme of the VCF
(dd/mm/yyyy)
3. Date of final closing of the scheme of the VCF
(dd/mm/yyyy)
4. Original tenure of the scheme of the VCF (in years)
5. Extension of tenure availed, if any (in years)
6. End date of tenure of the scheme of the VCF
(including extension of tenure availed, if any)
(dd/mm/yyyy)
7. End date of liquidation period of the scheme of the
VCF (dd/mm/yyyy)
8. Residual tenure of the scheme of Migrated VCF (in
years)
9. Amount of Commitment Raised by the scheme (In
INR Crore)
10. Amount of Fund Raised by the scheme (In INR Crore)
11. Cumulative investments made by the scheme
(at Cost, in INR Crore)
12. Details of unliquidated investments held by
scheme as on date of the application
Number of investments held
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Information as submitted
S. No. Particulars
by the applicant
Cumulative (total) amount invested (at cost, in INR
Crore)
Total value of investments as per latest valuation (in
INR Crore)
13. Whether the scheme has investment of not less than
five lakh rupees from each investor
(enclose a declaration to that effect)
14. Whether the scheme had a firm commitment from
the investors for contribution of an amount not
below rupees five crores before the start of
operations under VCF Regulations
(enclose a declaration to that effect)
Table 3 – Details of Regulatory Action
Information as submitted
S. No. Particulars
by the applicant
1. Whether there are any pending investor complaints
with respect to non-receipt of funds/securities,
against the VCF/any of the scheme of VCF whose
liquidation period has expired, at the time of filing
this information.
(Enclose a declaration to that effect)
2. Whether the applicant or Sponsor or its directors/
partners or Manager or its Directors/ Partners or
Trustees/ Trustee Company or its directors are/
were involved in any litigation connected with the
securities market and any order has/ had been
passed against them for violation of securities laws.
(If yes, provide details. If no, enclose a declaration to
that effect)
3. Whether the applicant/ Sponsor/ Trustee/ Manager
or its directors or Partners or employees are / have
been involved in any litigation connected with the
securities market which may have an adverse
bearing on the business of the applicant or any order
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Information as submitted
S. No. Particulars
by the applicant
has/ had been passed against them for violation of
securities laws.
(If yes, provide details. If no, enclose a declaration to
that effect).
4. Whether applicant/ Sponsor/ Trustee/ Manager or
its directors or Partners has/ have been refused a
certificate by the Board or its/ their certificate has
been suspended at any time prior to this application.
(If yes, provide details. If no, enclose a declaration to
that effect).
5. Whether the applicant, Sponsor and Manager are fit
and proper persons based on the criteria specified in
the Securities and Exchange Board of India
(Intermediaries) Regulations, 2008 (Enclose a
declaration to that effect).
DECLARATION STATEMENT
We hereby agree and declare that the information supplied in the application including the
attachment sheets, is complete and true.
AND we further agree that we shall notify Securities and Exchange Board of India
immediately any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992 and the Securities and Exchange Board of India (Alternative
Investment Fund) Regulations, 2012, and Government of India guidelines/instructions as
may be announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by Securities and Exchange Board of India from
time to time.
For and on behalf of (name of the applicant)
Authorized signatory
(signature)
Date:
Place:
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Annexure II
A. Applicability of chapters and provisions of Master circular for AIFs (Circular No.
SEBI/HO/AFD-1/AFD-1-PoD/P/CIR/2024/39 dated May 07, 2024) to Migrated VCFs
Extent of applicability of the Chapter
Title of Master Circular Chapters
to Migrated VCFs
The application for migration to AIF Regulations
shall be filed through SEBI Intermediary (SI)
Chapter 1 portal.
Online Filing System for AIFs
No application or registration fee is applicable
for migration to AIF Regulations.
Not applicable -
- Template for PPM and disclosures in PPM
(However, the disclosure in PPM to be in line
Chapter 2 with Regulation 19AC of AIF Regulations)
Filing of Private Placement Memorandum - Modalities for filing of PPM through a
(‘PPM’) and related compliance Merchant Banker
requirements - Timeline for declaration of First Close of
schemes of AIFs
- Audit of terms of PPM
- Changes in PPM
Not applicable -
Chapter 3
- In-principle approval
Registration related clarifications
- Change in category of AIF
Applicable -
- Para 4.1 and 4.2 of Master Circular for AIFs
pertaining to conditions for onboarding
investors in AIF (FATF / IOSCO MMoU
compliance)
- Para 4.3 of Master Circular for AIFs
Chapter 4
Investment in AIFs
Not applicable -
- Para 4.4 of Master Circular for AIFs
- Para 4.5 of Master Circular for AIFs pertaining
to contribution from Joint investors
- Para 4.6 of Master Circular for AIFs pertaining
to units to manager for profit sharing
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Extent of applicability of the Chapter
Title of Master Circular Chapters
to Migrated VCFs
- Para 4.7 of Master Circular for AIFs pertaining
to open ended schemes of Category III AIFs
Chapter 5
Operational and prudential norms for Not applicable
Category III AIFs
Chapter 6
Not applicable
Norms for Special Situation Funds (SSF)
Chapter 7
Guidelines for overseas investments by Applicable
AIFs and related reporting
Chapter 8
Not applicable
Investment in units of AIFs
Chapter 9
Participation of AIFs in Credit Default Not applicable
Swaps
Chapter 10
Transaction in Corporate Bonds through Applicable
Request for Quote (RFQ) platform by AIFs
Applicable -
- Schemes of AIFs that have adopted priority in
distribution among investors (Para 11.2 of
Master Circular for AIFs)
- Clarification related to investments as given
at para 11.1.1 and 11.1.2 of the Master
Chapter 11
Circular for AIFs
Other prudential and operational norms
and related clarifications
Not applicable -
- Calculation of tenure of close-ended schemes
of AIFs (Para 11.3 of Master Circular for AIFs)
- Clarification related to investments as given
at para 11.1.3, 11.1.4 and 11.1.5 of the
Master Circular for AIFs
Page 13 of 16
Extent of applicability of the Chapter
Title of Master Circular Chapters
to Migrated VCFs
Chapter 12
Not applicable
Framework for Accredited Investors
Applicable -
- Para 13.1.2 and 13.1.3 of Master Circular for
AIFs pertaining to Key Management Personnel
- Para 13.3 of Master Circular for AIFs pertaining
to Code of Conduct
- Para 13.4 of Master Circular for AIFs pertaining
to Stewardship Code
Chapter 13
- Para 13.5 of Master Circular for AIFs pertaining
Obligations of manager, sponsor and
to KYC / AML / Outsourcing of activities
trustee of AIFs
Not applicable -
- Para 13.1.1 of Master Circular for AIFs
pertaining to appointment of Compliance
Officer
- Para 13.2 of Master Circular for AIFs pertaining
to appointment of custodian
Chapter 14
Applicable
Constitution of investment committee
Chapter 15
Applicable
Reporting by AIFs
Chapter 16
Applicable
Performance Benchmarking of AIFs
Chapter 17
Investor Charter and Disclosure of Applicable
complaints by AIFs
Chapter 18
Collection of stamp duty on issue, transfer Applicable
and sale of units of AIFs
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Extent of applicability of the Chapter
Title of Master Circular Chapters
to Migrated VCFs
Chapter 19
Change in Sponsor and/or Manager or
Applicable
Change in control of Sponsor and/or
Manager of AIF
Issuance of units of AIFs in dematerialised form -
Applicable for fresh drawdowns
Chapter 20
Issuance and credit of units of AIFs in Credit of units of AIFs in dematerialized form -
dematerialised form Flexibility of crediting AIF units to aggregate
escrow demat account not applicable for units
issued against fresh drawdowns
Chapter 21
Holding investments of AIFs in Not applicable
dematerialised form
Applicable -
- Manner of valuation of AIF’s investments
(Para 22.1 of Master Circular for AIFs)
- Responsibility of manager of AIF with regard
to valuation of investments of AIF (Para 22.2
Chapter 22 of Master Circular for AIFs)
Standardised approach to valuation of - Reporting of valuation of investments
investment portfolio of Alternative of AIF to performance benchmarking
Investment Funds agencies (Para 22.4 of Master Circular for
AIFs)
Not applicable -
- Eligibility criteria for Independent Valuer
(Para 22.3 of Master Circular for AIFs)
Chapter 23
Modalities for launching Liquidation Framework of Dissolution Period and norms for
Scheme and for distributing the distributing the investments of Alternative
investments of Alternative Investment Investment Funds (AIFs) in-specie applicable
Funds (AIFs) in-specie
Page 15 of 16
Extent of applicability of the Chapter
Title of Master Circular Chapters
to Migrated VCFs
Chapter 24
Guidelines with respect to excusing or
Applicable
excluding an investor from an investment
of AIF
Chapter 25
Direct plan for schemes of Alternative
Not applicable
Investment Funds (AIFs) and trail model for
distribution commission in AIFs
B. Applicability of circulars issued under AIF Regulations in FY24-25 to Migrated VCFs:
Date of
Applicability on
Title
circular
Migrated VCFs
Standardization of the Private Placement Memorandum
Apr 18, 2024 Not applicable
(PPM) Audit Report
Flexibility to Alternative Investment Funds (AIFs) and their
Apr 26, 2024 investors to deal with unliquidated investments of their Applicable
schemes
Framework for Category I and II Alternative Investment
Apr 26, 2024 Funds (AIFs) to create encumbrance on their holding of Not applicable
equity of investee companies
Relaxation in requirement of intimation of changes in the
Apr 29, 2024 terms of Private Placement Memorandum of Alternative Not applicable
Investment Funds through Merchant Banker
Certification requirement for key investment team of
May 13, 2024 Not applicable
manager of AIF
Information to be filed by schemes of AIFs availing
Jul 09, 2024 dissolution period/additional liquidation period and Applicable
conditions for in-specie distribution of assets of AIFs
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