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, citing repeated failure to comply with mandatory reporting requirements. The decision, announced in an order dated June 17, follows the fund’s inability to submit quarterly activity reports for four consecutive quarters.

According to SEBI, the fund did not file Quarterly Activity Reports (QARs) for the quarters ending March 2025, June 2025, September 2025 and December 2025, despite multiple reminders and regulatory follow-ups. The regulator initiated summary proceedings under Section 12(3) of the SEBI Act and relevant provisions of the SEBI (Intermediaries) Regulations, 2008, after observing persistent non-compliance.

In its defence, ESG Impact Fund argued that technical and system-related issues on SEBI’s Intermediary (SI) Portal prevented it from successfully submitting the required filings. The fund stated that it had been in continuous communication with SEBI officials and the helpdesk since 2022 to resolve XML validation and upload errors, which allegedly blocked completion of its quarterly submissions.

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The fund further claimed that it had not commenced operations, raised capital, or made investments, and therefore faced difficulties in meeting reporting obligations. However, SEBI rejected this explanation, noting that while initial technical concerns were raised in 2023, the entity failed to demonstrate sustained efforts to resolve the issues or ensure compliance during 2025.

The regulator also clarified that other Alternative Investment Funds were able to file their reports successfully during the same period, and that inactive status does not exempt entities from regulatory obligations. SEBI emphasised that even funds with no business activity are required to submit “NIL” reports under the prevailing framework.

Concluding its findings, SEBI stated that the technical difficulties cited by the fund could not justify prolonged non-compliance. It added that ESG Impact Fund had not shown adequate diligence in fulfilling its statutory responsibilities, leading to the cancellation of its AIF registration with immediate effect.

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