Capital markets regulator Sebi on Monday proposed to provide flexibility to Alternative Investment Funds (AIFs), Venture Capital Funds (VCFs) and their investors to deal with unliquidated investments of their schemes beyond expiry of tenure. In its consultation paper, the regulator suggested that instead of launching a new liquidation scheme by AIFs, the same scheme itself can be allowed to continue with the unliquidated investments beyond their tenure for a certain period or dissolution period for fully liquidating their unliquidated investments. Additionally, the regulator proposed extending flexibility of the dissolution process to venture capital funds through migration to the AIF regime. At present, the option to launch liquidation scheme is available only to those schemes of AIFs which are under 'Liquidation Period'-- the period of one year following the expiry of tenure of the scheme for fully liquidating the scheme and not available to VCFs, irrespective of whether their ..