TaxTMI 
TaxTMI 
Guidelines for winding up of AIFs with respect to retention of proceeds and ‘Inoperative Fund’ status
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....SEBI from time to time. 2.2. Regulation 29(10A) - An AIF may be tagged as an inoperative fund, in such manner and subject to conditions as may be specified by SEBI from time to time. 2.3. Regulation 29(11) - Upon winding up of the AIF, the certificate of registration shall be surrendered to SEBI. The conditions and modalities with respect to retention of proceeds beyond permissible fund life, tagging as 'Inoperative Fund' and surrender of registration are being specified in this circular. Retention of proceeds beyond permissible fund life 3. AIFs/schemes of AIFs may retain liquidation proceeds beyond the liquidation period or dissolution period (beyond "permissible fund life"), as applicable, subject to satisfying at least one of the following conditions - 3.1. Demonstrable receipt of a litigation notice or demand by the AIF/scheme of AIF, which includes any official written communication from a tax authority, regulatory authority, law enforcement agency, court of law, or from an investor or counterparty in relation to litigation, which indicates a potential tax, regulatory or legal liability. This shall include show-cause notices, re-assessment notices, investiga....
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....pplication, the applicant AIF will be tagged as 'Inoperative Fund'. 11. Such Inoperative Fund shall apply to SEBI for surrender of its certificate of registration only after the liabilities are satisfied and the pending retained monies are distributed to the investors in all its schemes. Regulatory framework applicable to 'Inoperative funds' 12. An AIF tagged as 'Inoperative Fund' shall be subject to the following conditions, with effect from the date of obtaining the tag - 12.1. The monies retained by scheme(s) of such AIF in terms of paragraph 3 above, shall be invested in accordance with Regulation 15(1)(f) of the AIF Regulations; 12.2. No new scheme shall be launched under the AIF; and, 12.3. No management fees shall be charged in respect of any of its scheme(s). 13. The regulatory requirements as specified in Annexure B shall not be applicable to AIFs tagged as 'Inoperative Funds'. 14. AIFs having schemes which have retained monies in terms of paragraph 3 above and AIFs tagged as 'Inoperative Funds' shall submit an annual status report on retained monies and outstanding liabilities to SEBI and to investors of the relevant scheme(s), in the format as giv....
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.... (Information shall be submitted at scheme level, separately for each scheme of the AIF) 9. Name of scheme 10. Date of initial closing of the fund (dd/mm/yyyy) 11. Date of final closing of the fund (dd/mm/yyyy) 12. Tenure of the fund (in years, as disclosed in PPM of the fund) 13. Extension of tenure availed, if any (in years) 14. Dissolution period availed, if any (from dd/mm/yyyy to dd/mm/yyyy) 15. End Date of permissible fund life (end of liquidation period or dissolution period as applicable in dd/mm/yyyy format) 16. Corpus of the scheme (in INR Crore) 17. Cumulative investments made by the scheme (at Cost, in INR Crore) 18. Date of liquidation of last investment of the scheme (in dd/mm/yyyy format) 19. Liquidation proceeds accrued to the fund (in INR Crore) 20. Liquidation proceeds distributed to the investors (in INR Crore) 21. Date....
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.... 5. The retained monies shall be invested only in accordance with Regulation 15(f) of the AIF Regulations. 6. An annual status report shall be submitted to SEBI and to the investors of the relevant scheme(s) until all liabilities are resolved and a NIL bank balance is achieved. 7. The retention proceeds pending after meeting the liabilities and any proceeds received pursuant to a favourable litigation outcome, shall be distributed to the investors of the fund in accordance with terms of its PPM. For and on behalf of [Name of Manager], manager of [Name of AIF] Authorized signatory Part D - Undertaking to be submitted by the Trustee / Board of Directors/ Designated Partners of the AIF (as applicable depending on the form of AIF) We, [Name of entity], trustee/Board of Directors/Designated Partners of the AIF, have reviewed the circumstances of [Name of the AIF] and we are satisfied that the application for 'Inoperative Fund' status is bona fide in nature and the amounts retained, if any, are solely on account of the ground(s) specified in the application. For and on behalf of [Name of Entity], trustee/Board of Directors/Designated Partners of [Name....
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....ments of AIFs (Regulation 23(2) and 23(3) of AIF Regulations) Date of obtaining Inoperative Fund status - The valuation shall be reported to investors as part of annual retention status report and accordingly, the updated Net Asset Value of the AIF units shall also be reported to depositories within 30 calendar days from the end of March of every financial year. Annexure C Format for Annual Retention Status Report (To be submitted to SEBI and investors within 30 calendar days from the end of March of every financial year) Details of AIF and its scheme(s) S. No. Information related to Particulars Details 1. Details of AIF a) Name of the AIF b) Category of the AIF c) Registration Number d) Date of obtaining 'Inoperative Fund' status (If applicable) 2. Details of scheme(s) with retained monies* a) Name of the scheme(s) b) End date of permissible fund life (end of liquidation period or dissolution period as applicable in dd/m....