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SEBI Simplifies AIF Exit Rules, Unveils 'Inoperative Fund' Structure

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SEBI Eases AIF Exit Norms, Introduces 'Inoperative Fund' Framework

the regulator will introduce a new category of “inoperative funds.” These funds will be subject to lighter compliance requirements until they formally surrender their registration, reducing the regulatory burden during the wind-down phase.

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Moneycontrol•23-03-2026, 17:56

SEBI Eases AIF Exit Norms, Introduces 'Inoperative Fund' Framework

•SEBI approves reforms to simplify winding-up process for Alternative Investment Funds (AIFs).
•Amendments to AIF Regulations, 2012, allow greater flexibility in handling residual assets and liabilities post-tenure.
•AIFs can now retain liquidation proceeds beyond fund life for tax or legal contingencies.
•New 'inoperative funds' category introduced with lighter compliance requirements during wind-down phase.
•Move aims to streamline fund closures, reduce compliance costs, and provide operational clarity for AIF managers.

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