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SEBI Provides Flexibility to AIFs to Deal With Illiquid Investments During the Winding-Up Process June 21, 2023
Published in: Investment Funds
DISCLAIMER: The material contained in this publication is solely for information and general guidance and not for advertising or soliciting. The information provided does not constitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this publication to ensure its accuracy, Vaish Associates Advocates neither assumes responsibility for any errors, which despite all precautions, may be found herein nor accepts any liability, and disclaims all responsibility, for any kind of loss or damage arising on account of anyone acting / refraining to act by placing reliance upon the information contained in this publication.
SEBI, vide its circular dated June 21, 2023, has sought to provide flexibility to AIFs to deal with their scheme’s investments that remain unsold due to lack of liquidity during the winding-up process by either:
Both of the above processes are subject to consent of 75% of investors by value of their investment in the original scheme. Pertinently, the circular also provides that it would be mandatory to do in-specie distribution of unliquidated investments if the AIF fails to obtain requisite investor consent for launch of liquidation scheme or in-specie distribution of unliquidated investments.
Further, the circular throws light on valuation norms for unliquidated investments, responsibilities of compliance and the process of writing-off such investments if requisite investor consent has not been obtained.
To read the circular click here
For any clarification, please write to:
Mr. Yatin Narang
Partner
[email protected]
