SEBI Cancels ESG Impact Fund’s AIF Licence Amid Compliance Shortcomings

The Securities and Exchange Board of India (SEBI) has revoked the Alternative Investment Fund (AIF) registration of ESG Impact Fund (EIF) with immediate effect. The action follows the fund’s failure to meet mandatory reporting requirements for four consecutive quarters in 2025. The order was issued on 17 June 2026. The incident marks another regulatory action by the market watchdog against non-compliant AIFs.

Four Consecutive Quarters Of Non-Reporting

According to SEBI, the ESG Impact Fund did not submit Quarterly Activity Reports (QARs) for the quarters ended March 2025, June 2025, September 2025 and December 2025. Under AIF regulations, registered funds are required to file these reports through SEBI’s Intermediary Portal within 15 calendar days of the end of each quarter.

The regulator commenced summary proceedings under Section 12(3) of the SEBI Act, 1992, read with Regulation 30A of the SEBI (Intermediaries) Regulations, 2008, after detecting persistent reporting violations.

EIF stated that technical problems with XML validation and report uploads on SEBI’s portal led to delays in timely submissions. The fund stated that it had been in communication with SEBI officials, the AIF reporting team and the portal helpdesk since 2022 to resolve these issues. It also maintained that it had neither raised capital nor commenced investment operations.

SEBI Rejects Technical Glitch Defence

SEBI rejected the fund’s explanation, noting that the entity had been registered as an AIF since May 2017 and had failed to demonstrate sufficient efforts to resolve the filing issues during 2025. The regulator observed that other market participants were able to submit reports successfully during the same period. It further highlighted that EIF had not raised funds or made investments since registration but remained obligated to file “NIL” reports.

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The regulator also noted that the fund failed to submit a chartered accountant’s certificate when advised to do so. Consequently, SEBI concluded that prolonged non-compliance warranted cancellation of the fund’s registration with immediate effect.

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