SetHandleInformation failed with error code ERROR_ACCESS_DENIED (5)

My code opens a virtual NIC device using CreateFile. After that I am calling SetHandleInformation on the handle returned by CreateFile to avoid leaking the handle to child processes. The problem is, SetHandleInformation fails with error code 5 (ERROR_ACCESS_DENIED). Following is the piece of code where I am opening the device and calling SetHandleInformation:

handle = CreateFile(dev_name, GENERIC_READ | GENERIC_WRITE, 0, NULL, OPEN_EXISTING, FILE_ATTRIBUTE_SYSTEM | FILE_FLAG_OVERLAPPED,NULL);  
if (handle != INVALID_HANDLE_VALUE) {  
    if (!(SetHandleInformation(handle, HANDLE_FLAG_INHERIT, 0))) {
        printf("SetHandleInformation error, code: %u\n", GetLastError());
    }
}

I am observing this failure on Windows 10. My application is running with Administrator privileges. I am able to successfully use the handle for read and write even after this failure, which indicates that CreateFile is working fine.

What could be the possible reason of this failure? I could not find much information on SetHandleInformation failure with error code 5.