The Securities and Exchange Board of India (SEBI) has cancelled the registration of ESG Impact Fund (EIF) as an Alternative Investment Fund (AIF) with immediate effect after the fund failed to file mandatory quarterly activity reports for four consecutive quarters.
In an order issued on June 17, SEBI said the fund did not submit Quarterly Activity Reports (QARs) for the quarters ending March 2025, June 2025, September 2025 and December 2025, despite repeated regulatory reminders and follow-ups.
The regulator initiated summary proceedings against the fund under Section 12(3) of the SEBI Act and Regulation 30A of the SEBI (Intermediaries) Regulations, 2008, after noting persistent non-compliance with reporting requirements applicable to registered AIFs.
ESG Impact Fund defended its failure to file the reports by citing technical and system-related issues on SEBI's Intermediary (SI) Portal. The fund said it had been corresponding with SEBI officials, the AIF reporting team and the portal helpdesk since 2022 to resolve XML validation and upload errors that allegedly prevented successful filing of reports.
According to the fund, unresolved issues with previously uploaded reports had blocked subsequent quarterly filings despite repeated attempts. It also submitted that it had not commenced operations, raised capital or made investments.
However, SEBI rejected the explanation, observing that while the fund had initially approached the regulator regarding technical issues in 2023, it failed to demonstrate sufficient efforts to resolve the problems or complete its filings during 2025.
The regulator noted that SEBI had provided guidance and technical assistance to address filing-related issues and that other market participants had successfully filed their reports during the same period.
SEBI further observed that the fund, which has been registered as an AIF since May 2017, had not raised any funds or made investments. Nevertheless, the regulator clarified that AIF regulations do not exempt inactive funds from reporting obligations.
"The Master Circular on AIFs does not carve out an exception for AIFs which have not launched any schemes," SEBI said in the order, adding that the fund was required to submit "NIL" reports even in the absence of business activity.
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The regulator also noted that the fund failed to furnish a chartered accountant's certificate after being advised to do so while claiming that certain reporting requirements were not applicable because it had not commenced operations.
Concluding that the technical glitches cited by the fund could not justify prolonged non-compliance, SEBI said the entity had demonstrated a lack of diligence in meeting its regulatory obligations.
The market regulator subsequently cancelled ESG Impact Fund's certificate of registration as an Alternative Investment Fund, with the order taking effect immediately.
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