Singularity AMC LLP has paid ₹40.49 lakh to settle two cases with the Securities and Exchange Board of India (SEBI) over alleged violations of alternative investment fund (AIF) regulations. In separate settlement orders dated October 12, 2026, the regulator recorded a payment of ₹9.37 lakh in the Singularity Equity Fund matter and ₹31.12 lakh in a case involving three schemes of the Singularity Growth Opportunities Fund. The proceedings concerned the manager’s continuing-interest obligations and the proportion of drawdowns made from investors.
The cases highlight the compliance responsibilities of AIF managers, which must follow regulatory requirements governing their own investment in funds, the collection of capital from investors and the operation of individual schemes. Singularity AMC submitted settlement applications without admitting or denying the findings of fact and conclusions of law. SEBI said the proceedings covered by the orders had been settled, while retaining the right to take further action if misrepresentation is discovered or the settlement terms are breached.
Key Takeaways
- Total settlement: Singularity AMC paid ₹40.49 lakh to settle two SEBI cases.
- First case: ₹9.37 lakh was paid in connection with Singularity Equity Fund.
- Second case: ₹31.12 lakh was paid in connection with three schemes of Singularity Growth Opportunities Fund.
- Continuing-interest issue: SEBI found that the prescribed continuing interest was not maintained in Singularity Equity Fund during the quarters from September 2023 to June 2024.
- Drawdown issue: SEBI observed that drawdowns in three schemes were not proportionate to those made from other investors.
- No admission or denial: Singularity AMC filed settlement applications without admitting or denying the findings.
- Regulatory position: SEBI settled the proceedings covered by the orders but retained its ability to act in specified circumstances, including misrepresentation or breach of settlement conditions.
What Happened in the Singularity AMC-SEBI Cases?
Mumbai-based Singularity AMC LLP manages alternative investment funds, which pool capital from eligible investors and invest it according to a defined strategy. Such funds are subject to SEBI regulations that specify requirements for fund managers, sponsors, investment structures and operational practices.
SEBI issued two separate settlement orders relating to Singularity AMC. The first concerned the prescribed continuing interest in Singularity Equity Fund, a registered Category III AIF managed by the firm. The second involved the timing and proportionality of drawdowns in three schemes associated with Singularity Growth Opportunities Fund.
The regulator recorded settlement payments of ₹9.37 lakh and ₹31.12 lakh, respectively. Together, the amounts total ₹40.49 lakh.
The distinction between the cases is important because they concerned different compliance requirements. The continuing-interest matter related to the required investment commitment from the manager or sponsor. The drawdown matter concerned whether capital was called from the manager in proportion to capital called from other investors.
Singularity AMC submitted suo-motu settlement applications, meaning it approached the regulator to settle the matters rather than waiting for the proceedings to run their full course. The applications did not constitute an admission of the findings.
The orders resolve the proceedings covered by the settlements, subject to the conditions specified by SEBI. They should not be interpreted as a blanket exemption from AIF regulations or as a finding that all of the firm’s operations have been cleared of compliance concerns.
Why Did SEBI Raise the Continuing-Interest Issue?
One of the cases concerned Singularity Equity Fund, a Category III AIF registered with SEBI. The regulator found that the manager or sponsor had failed to maintain the prescribed continuing interest in the fund for the quarters from September 2023 to June 2024.
Continuing interest is intended to ensure that the manager or sponsor has a financial stake in the fund alongside its investors. It helps align the interests of the people responsible for managing the fund with those who provide the capital.
Under the requirement cited in the case, AIFs must maintain continuing interest of at least 5% of the corpus or ₹10 crore, whichever is lower. The requirement applies according to the relevant regulatory provisions and the category and structure of the fund.
The rule is significant because fund managers make decisions about investment selection, portfolio construction, risk and liquidity. A prescribed continuing interest gives the manager or sponsor an ongoing financial commitment rather than leaving all investment exposure with outside investors.
How continuing interest works
Consider a hypothetical AIF with a corpus of ₹100 crore. Five per cent of the corpus would be ₹5 crore, which is lower than ₹10 crore. Under the requirement cited in the Singularity Equity Fund case, the minimum continuing interest would therefore be ₹5 crore.
For a fund with a corpus of ₹500 crore, 5% would be ₹25 crore. The lower figure between ₹25 crore and ₹10 crore would be ₹10 crore.
| Hypothetical fund corpus | 5% of corpus | Lower amount under the cited threshold |
|---|---|---|
| ₹100 crore | ₹5 crore | ₹5 crore |
| ₹200 crore | ₹10 crore | ₹10 crore |
| ₹500 crore | ₹25 crore | ₹10 crore |
| ₹1,000 crore | ₹50 crore | ₹10 crore |
Illustrative calculations based on the continuing-interest threshold cited in the case. These examples are not the actual corpus figures of Singularity Equity Fund.
The requirement does not mean that every AIF must invest the same amount. The calculation depends on the corpus and the applicable rules. The actual compliance assessment also depends on the fund’s legal structure and the relevant regulatory provisions.
In Singularity AMC’s case, SEBI identified a failure to maintain the prescribed interest over the specified reporting periods. The firm paid ₹9.37 lakh to settle the matter.
What Were the Alleged Drawdown Violations?
The second case concerned three schemes: Singularity Growth Opportunities Fund II, Singularity Early Opportunities Fund and Founders Collective Fund.
SEBI observed that drawdowns made by the manager were not proportionate to those made from other investors in the schemes. A drawdown is a request by a fund for investors to contribute a portion of the capital they have committed, usually when the fund needs money to make investments or meet expenses.
The timing and proportion of these requests matter because fund managers must operate according to the applicable rules and the terms agreed with investors. If capital is called from different participants inconsistently with those requirements, it can raise questions about fairness, financial alignment and compliance.
According to the reported details, the issues involving Singularity Growth Opportunities Fund II and Singularity Early Opportunities Fund were observed from the quarter ended June 2024 through the quarter ended June 2025. The issue involving Founders Collective Fund related to the quarters ended June and September 2024.
The three schemes were grouped in the second settlement matter, for which Singularity AMC paid ₹31.12 lakh.
Why proportional drawdowns matter
Investors in a private fund typically commit capital that may be called over time. They do not necessarily transfer their entire commitment on the day they subscribe.
The manager must administer those commitments according to the fund documents and applicable regulations. The amount and timing of drawdowns can affect how capital is deployed, how investor obligations are met and how the fund’s financial arrangements operate.
A proportionality requirement can help ensure that the manager’s own contribution remains aligned with contributions required from other investors, where the relevant rules apply. It also helps avoid a structure in which the manager’s funding obligations are treated differently from those of the investors whose money it manages.
The precise implications of a drawdown issue depend on the fund’s terms, the regulatory provision involved and the facts of the case. SEBI’s settlement orders address the matters identified by the regulator; the publicly reported summary does not establish that investors suffered a specific financial loss.
Breakdown of the ₹40.49 Lakh Settlement
The total amount comprises two separate payments rather than a single settlement covering only one fund.
| Settlement matter | Issue identified by SEBI | Settlement amount |
|---|---|---|
| Singularity Equity Fund | Failure to maintain prescribed continuing interest | ₹9.37 lakh |
| Singularity Growth Opportunities Fund schemes | Disproportionate drawdowns in three schemes | ₹31.12 lakh |
| Total | Two separate settlement matters | ₹40.49 lakh |
Source: SEBI settlement orders dated October 12, 2026, as reported by PTI and The Economic Times.
The second payment accounted for the larger share of the total. The difference reflects the separate settlement amounts associated with the two matters, not necessarily a direct comparison of the seriousness of the alleged violations.
Settlement amounts should also not be confused with the value of an AIF’s assets or the amount of capital involved in a fund. The ₹40.49 lakh represents the payments made to settle the proceedings described in the orders.
What Does a SEBI Settlement Mean?
SEBI has powers to investigate and address violations of securities-market rules. In appropriate cases, parties can seek to settle proceedings under the applicable settlement framework.
A settlement can resolve specified proceedings without requiring the applicant to admit or deny the regulator’s findings. That is the position reported in Singularity AMC’s two applications.
This distinction matters when interpreting regulatory news. A settlement does not automatically mean that the applicant has admitted every allegation, but neither should it be described as a finding that the underlying conduct was compliant.
The outcome is defined by the settlement order and its terms. In this case, SEBI said it would not initiate enforcement action against Singularity AMC for the violations covered by the orders following payment of the settlement amounts.
The regulator also retained the right to take further action if it discovers misrepresentation or if the company breaches the terms of the settlement. The orders therefore resolve the specified matters without removing SEBI’s broader regulatory authority.
For investors and the wider AIF industry, the cases illustrate the importance of maintaining records, monitoring capital commitments and ensuring that operational practices remain consistent with regulatory requirements.
Why AIF Compliance Matters to Investors
Alternative investment funds provide access to investment strategies that differ from traditional mutual funds. Depending on their category and mandate, AIFs may invest in listed securities, private companies, early-stage businesses, credit instruments or other assets.
Their flexibility comes with responsibilities. Managers must comply with registration requirements, fund documents, investment restrictions, reporting obligations and applicable investor-protection rules.
Continuing-interest requirements are intended to align the financial interests of managers or sponsors with investors. Drawdown procedures are important because they govern when and how committed capital is collected.
Failures in these areas can raise questions about a manager’s internal controls and operational discipline. They may also lead to regulatory scrutiny, settlement costs or other consequences, depending on the facts and applicable rules.
However, investors should avoid drawing conclusions about an entire fund solely from a settlement headline. Relevant questions include the precise rule involved, the period of non-compliance, the terms of the settlement, whether any investor impact was identified and what corrective measures were taken.
The reported settlement does not provide enough information to conclude that investors suffered losses or that the affected schemes experienced poor investment performance. Regulatory compliance and investment returns are related to overall fund governance but are distinct questions.
What AIF Managers Can Learn From the Case
The two matters point to practical compliance priorities for alternative investment fund managers.
Monitor continuing interest. Managers and sponsors need a process to calculate the applicable requirement, verify their holdings and monitor compliance across reporting periods. Changes in the fund’s corpus or structure can affect the amount required.
Review capital-call processes. Drawdowns should be checked against fund documents and applicable rules. Managers need clear records showing the amounts called from each relevant participant and the basis for those calls.
Maintain auditable records. Documentation of investor commitments, capital calls, payments and compliance reviews can help firms identify discrepancies and demonstrate how they have applied the rules.
Escalate exceptions promptly. If an operational issue arises, a documented process for investigation, correction and regulatory engagement can help reduce the risk of a problem continuing across multiple quarters.
Keep legal and operational teams aligned. AIF compliance involves more than preparing periodic filings. Fund managers need coordination among investment, finance, operations, legal and compliance functions so that the fund’s day-to-day practices match its obligations.
These are general compliance lessons, not claims about the corrective actions Singularity AMC has taken. The reported settlement orders do not, by themselves, establish what internal changes the firm has implemented.
The Bigger Picture
Singularity AMC’s ₹40.49 lakh settlement brings attention to the operational requirements governing India’s alternative investment fund industry. The two cases concerned different aspects of fund administration: maintaining the prescribed continuing interest and ensuring that drawdowns from the manager were proportionate to those made from other investors in specified schemes. Both requirements are designed to support consistent fund governance and the proper administration of investor commitments.
For the wider industry, the case is a reminder that compliance obligations extend beyond investment performance and portfolio returns. Managers must also maintain appropriate financial commitments, administer capital calls correctly and retain records that support their decisions. The settlement resolves the proceedings covered by SEBI’s orders, but the regulator’s stated reservation of rights shows that settlement does not eliminate the consequences of misrepresentation or a breach of settlement conditions.
Looking Ahead
The next focus will be whether Singularity AMC’s settlement leads to any further regulatory disclosures or clarifications about the affected schemes. The available reports establish the settlement amounts and the issues identified by SEBI, but they do not provide a complete account of any investor-level financial impact or the firm’s subsequent internal compliance measures. Those details should not be inferred without additional documentation.
More broadly, AIF managers will continue to operate under SEBI’s regulatory framework, with compliance depending on the specific category, structure and terms of each fund. For investors, the case reinforces the importance of reviewing fund documents, governance practices and regulatory disclosures alongside performance data. A settlement is a material compliance development, but its implications should be assessed in the context of the specific findings and the terms of the order.
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