Market regulator Securities and Exchange Board of India (SEBI) has cancelled the registration of ISF Special Opportunity Fund, an alternative investment fund (AIF), for repeatedly failing to file mandatory quarterly activity reports (QARs) despite repeated opportunities to comply. The regulator found that the fund had failed to submit QARs for the quarters ending March, June, September and December 2025, in violation of the AIF Regulations and SEBI's reporting requirements.
The order, passed under Section 12(3) of the SEBI Act read with Regulation 30A of the SEBI (Intermediaries) Regulations, immediately cancels the fund's certificate of registration (registration number IN/AIF1/18-19/0575).
SEBI noted that all registered AIFs are required to file quarterly activity reports within 15 calendar days from the end of each quarter through the SEBI intermediary portal in the prescribed format. The reporting requirement enables the regulator to monitor AIF activities and ensure regulatory compliance.
After detecting the non-compliance, SEBI initiated summary proceedings and issued a show-cause notice (SCN) in April 2026, asking the fund to explain why its registration should not be cancelled. In response, the fund requested additional time and attributed the failure to delayed logins and technical issues with the reporting portal. It also claimed that its annual activity report had been filed and that it was in the process of completing the pending quarterly reports.
The regulator, however, found the explanation unconvincing. SEBI observed that the fund had raised similar technical issues as far back as in 2023, but had taken no meaningful steps thereafter to resolve the problem or ensure the timely filing of the reports for 2025. It also noted that the claimed annual activity report was not reflected in its system.
The fund further informed SEBI that it had not raised any money from investors since its registration. However, the regulator clarified that this did not exempt it from filing periodic reports. Even if an AIF has not launched any scheme or mobilised funds, it is still required to submit a 'NIL' report within the prescribed timelines.
Rejecting the defence of technical glitches, SEBI held that the fund had demonstrated a complete lack of diligence by failing to comply with mandatory reporting obligations for an extended period. The regulator concluded that prolonged non-compliance could not be justified on the grounds cited by the fund and warranted regulatory action.
Accordingly, SEBI cancelled the registration of ISF Special Opportunity Fund with immediate effect.
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