Net asset value for each Venture Capital Scheme must be computed by the Fund Management Entity at least annually. The calculation procedure and methodology must be fully documented and regularly verified, with amendments made where necessary.

Valuation of venture capital scheme assets must comply with the investment valuation norms in the Sixth Schedule, and the Fund Management Entity and fiduciaries must ensure compliance. Assets are to be valued by an independent service provider, including a fund administrator, custodian, registered credit rating agency, registered valuer, or another person specified by the Authority. The requirement does not apply to qualifying fund of funds investments in regulated schemes already valued by an independent entity.

Borrowing and leverage by Venture Capital Schemes are permitted only where the placement memorandum discloses the maximum leverage and calculation methodology. Leverage must comply with those disclosures, and any deviation requires consent of investors holding at least two-thirds in value. A Fund Management Entity proposing to employ leverage must maintain a comprehensive risk-management framework appropriate to the scheme's size, complexity and risk profile.

Disclosure obligations for Venture Capital schemes require the placement memorandum to cover investment objectives, targeted investors, corpus, strategy, methodology, tenure, fees, expenses, risk management, key managerial personnel, and relevant FME and scheme particulars. The FME must disclose Net Asset Value annually within the placement memorandum timeframe and portfolio information annually within one month after each financial year. Material information identified by the FME or fiduciaries must be communicated immediately, subject to further Authority-specified disclosure requirements.

Venture Capital Schemes must maintain a corpus within prescribed minimum and maximum limits and invest at least 80 per cent of their corpus in recently incorporated investee companies or qualifying schemes. Associate investments require prior approval of 75 per cent of investors by value. Securities transactions involving associates, related schemes, or a substantial investor require the same approval, with the interested substantial investor excluded from voting. Fund of funds schemes may rely on placement memorandum disclosure of underlying schemes and relevant managerial associations instead of obtaining approval.

Venture Capital schemes may invest in specified securities, debt and money market instruments, securitised debt, limited liability partnerships, and permitted scheme or fund units, with placement memorandum disclosure where required. Pending deployment of funds, the fund management entity may use certificates of deposit, bank deposits, money market instruments and specified investment-scheme units. Every investment must comply with regulatory requirements, the scheme's investment objective and placement memorandum disclosures.

Venture Capital schemes must operate solely as close-ended schemes, with the amount proposed to be raised and a minimum three-year tenure disclosed in the placement memorandum. A scheme may be constituted as a company, limited liability partnership, or trust. Tenure extensions require investor approval, and extensions beyond two years require express consent from willing investors and an exit opportunity for dissenting investors.

Venture Capital Schemes are limited to fifty investors and permit investment by persons meeting the prescribed minimum threshold or by Accredited Investors. Employees, directors and designated partners of the Fund Management Entity may invest subject to a reduced threshold, while Accredited Investors are exempt from minimum investment requirements. Joint investors must each meet the applicable minimum contribution, with specified family relationships permitted to satisfy the general threshold on an aggregate basis. Registered Fund Management Entities may use restricted schemes to target more investors or accept lower application sizes.

Delhi Authority for Advance Ruling directed the System Analyst, EDP Cell of the Department of Trade and Taxes, to upload a specified advance ruling on the GST portal. The direction concerns Advance Ruling No. 13/DAAR/2025 dated 1 October 2025, issued in relation to M/s Young Optimistic Transport Solutions Private Limited. The upload is intended to place the ruling in the public domain, with intimation to the concerned branch after completion.

Placement memorandum filing permits a Fund Management Entity to launch Venture Capital schemes through private placement under the green channel. Investor subscriptions may begin once the Authority communicates that the placement memorandum has been taken on record, subject to incorporation of any comments. The memorandum remains valid for twelve months, within which the FME must achieve the prescribed minimum corpus and declare first close. A one-time six-month extension is available on payment of the specified fee, and material changes must be immediately reported.

Venture Capital Schemes under Part A must be filed as a venture capital fund within Category I Alternative Investment Fund. A scheme filed under this framework may be construed as a venture capital fund for purposes of the Income Tax Act, the Foreign Exchange Management Act, and related rules, regulations, circulars, notifications, guidelines, or other relevant statutes.

Regulation 17 requires a Fund Management Entity to appoint prescribed fiduciaries before filing a scheme document. Companies require a Board of Directors, limited liability partnerships require Designated Partners, and trusts require Trustees, including the board of a trustee company where applicable. All fiduciaries must meet fit and proper requirements. Appointment of fiduciaries for retail schemes requires prior approval, and fiduciaries must comply with the applicable Code of Conduct and obligations.

Surrender of registration permits a Fund Management Entity to apply to the Authority for voluntary surrender of its certificate of registration. The surrender becomes effective only when accepted by the Authority, and filing an application alone does not terminate registration.

Registration of a Fund Management Entity remains valid for the period specified by the Authority, unless earlier suspended, cancelled, or surrendered and taken on record by the Authority.

Registration applications for Fund Management Entities may be refused only after deficiencies are communicated and the applicant is allowed 30 days to rectify them. If the deficiencies are not rectified to the Authority's satisfaction within that period, the Authority may refuse registration and must communicate the refusal with reasons.

Registration of a Fund Management Entity is conditional on regulatory compliance by the entity and its relevant officers and personnel. The entity must promptly notify the Authority of material changes in previously provided information or particulars affecting its registration. A registered entity cannot change its registration category without prior approval from the Authority.

Grant of Certificate of Registration as a Fund Management Entity may be made by the Authority after receiving all required information and being satisfied that the applicant qualifies under the appropriate category. Grant is subject to payment of the applicable registration fee.

Furnishing of information for Fund Management Entity registration permits the Authority to seek further information or clarifications about the applicant, the fund, proposed fund management activities, or related matters when considering a registration application. The applicant may be required to appear for personal representation, and the Authority may inspect the applicant's office before granting a certificate of registration.

Infrastructure requirements for registration of a Fund Management Entity require adequate office space, equipment, communication facilities and manpower to effectively conduct activities in an IFSC. These facilities must be commensurate with the scale of its IFSC operations. The office must be dedicated and secured, and access must be restricted to authorised persons of the Fund Management Entity.

Registration of a Fund Management Entity requires the applicant and its principal officers, management personnel and controlling shareholders to remain fit and proper at all times. The standard requires fairness, integrity, financial integrity, reputation, character and honesty. Disqualifications include convictions or pending proceedings for specified offences, insolvency, wilful default, regulatory recovery action, market-access restrictions, malfeasance-related winding-up, fugitive economic offender status and other specified grounds. Persons declared not fit and proper remain ineligible for registration until they satisfy the prescribed criteria.