Brands and Beyond India Fund I was required to submit quarterly reports on its activities through SEBI's intermediary portal within 15 days from the end of each quarter. However, the Fund failed to file the reports despite the regulatory requirement and subsequent communications from SEBI.
Following the non-compliance, SEBI initiated summary proceedings under Regulation 30A of the SEBI (Intermediaries) Regulations, 2008, and issued a show-cause notice (SCN) in April 2026 asking the Fund to explain why its registration should not be cancelled.
In its response, the Fund argued that it had remained dormant since inception, with no investors, no capital commitments and no operational activity. It contended that the non-filing of QARs resulted from circumstances beyond its control, including lack of access to SEBI's intermediary portal credentials, which were allegedly held by one of its designated partners, a French national who later became inaccessible. The Fund also stated that it had already initiated the process of surrendering its registration and winding up operations.
The AIF further claimed that after it had informed SEBI in January 2024 about its dormant status, it did not receive any follow-up communication from the regulator and therefore believed that dormant funds were exempt from filing QARs. It also maintained that the failure to file reports was a technical lapse rather than a deliberate attempt to evade regulatory obligations.
SEBI rejected these arguments, holding that the obligation to file periodic reports applies to all registered AIFs regardless of whether they are active or dormant. The regulator noted that there is no exemption under the AIF regulatory framework for dormant funds and that even a 'NIL' report must be filed within the prescribed timelines.
The regulator also dismissed the contention that lack of access to portal credentials justified the default. According to SEBI, internal management issues, disputes among partners or communication failures cannot excuse a registered entity from meeting statutory compliance requirements. The regulator observed that the Fund and its trustee eventually managed to obtain portal access in 2026, indicating that timely efforts could have prevented the prolonged default.
SEBI further held that regulatory exemptions cannot be assumed merely because the regulator does not immediately respond to an explanation submitted by an intermediary. Any waiver or modification of reporting obligations must be granted expressly through regulatory provisions or written directions, it said.
After examining the submissions and the applicable regulations, SEBI concluded that the violations had been established and that cancellation of registration was appropriate under Section 12(3) of the SEBI Act read with Regulation 30A of the Intermediaries Regulations. Accordingly, the regulator cancelled the certificate of registration of Brands and Beyond India Fund I with immediate effect.
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