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Pursuant to the consultation paper discussed in our March 2026 edition of Inter Alia (the writeup can be accessed here), SEBI on June 16, 2026, issued a Circular formalising the framework for winding up of AIFs and surrender of registrations. Notably, the Circular: (i) expands the scope of ‘demonstrable receipt’ to include show-cause notices, re-assessment notices, investigation summons, and communications from investors or counterparties (not limited to crystallised demands); (ii) mandates the Standard Setting Forum for AIFs to formulate implementation standards for operational expense heads; and (iii) prescribes additional compliance exemptions for Inoperative Funds, including from NISM certification, custodian requirements, investor disclosures under Regulation 22(a), performance benchmarking, and investment valuation requirements. The Circular also prescribes the application format for seeking Inoperative Fund status and the format for annual retention status reports. The facility extends to Venture Capital Funds.
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