SEBI’s new framework allowing Alternative Investment Funds (AIFs) to retain liquidation proceeds beyond their fund life addresses a key regulatory gap in fund wind-downs.
Previously, managers often relied on contractual protections or extended fund life to manage pending tax claims, litigation, indemnity obligations, and other contingent liabilities.
Commenting on the development, Partner, Nandini Pathak, said:
“AIF managers generally rely on contractual measures including investor giveback and indemnities, as well as some limited types of insurance, to address potential liabilities in the absence of a clear regulatory framework dealing with end-of-life issues faced by limited-life or close-ended funds.”
Read More: SEBI plugs long-standing gap in AIF winding-up process – The HinduBusinessLine
