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IFSCA Updates Fund Management Regulations, 2025

  • 22-Feb-2025
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The International Financial Services Centres Authority (IFSCA) has introduced key updates to its Fund Management Regulations, 2022, effective February 19, 2025. These revisions align with the December 2024 proposals and bring significant changes for funds operating in the GIFT IFSC.

🔹 Key Amendments

1️⃣ Non-Retail Schemes (Venture Capital Schemes & AIFs)

✅ Minimum Scheme Corpus: Reduced from USD 5 million to USD 3 million. Open-ended schemes can commence investments at USD 1 million, reaching the minimum within 12 months.
✅ FME Contribution: Fund Management Entities (FMEs) can now contribute up to 100% of the scheme’s corpus, subject to:

  • The FME and its associates being non-residents of India.
  • Investment capped at one-third of the corpus in a single company and its associates.
    ✅ Joint Investments: Now permitted among related individuals.

2️⃣ Manpower & Qualification Requirements for FMEs

✅ KMP Requirement: FMEs managing AUM over USD 1 billion must appoint an additional Key Managerial Personnel (KMP).
✅ Employee Certification: All FME employees must obtain IFSCA-specified certifications.
✅ KMP Appointments: Prior approval from IFSCA is no longer required; FMEs only need to inform IFSCA post-appointment.

📌 Qualifications & Experience Amendments:

  • Postgraduate diploma duration requirement reduced from two years to one year.
  • CFA and FRM certifications are now accepted as valid qualifications.
  • A graduate degree suffices for a Principal Officer (PO) with 15 years of relevant experience.
  • Up to two years of consultancy experience in fund management (e.g., deal due diligence, transaction advisory) can count toward the five-year experience requirement.

3️⃣ Retail Schemes

✅ Track Record Evaluation: Now considers the collective experience of the registered FME’s group.
✅ Scheme Listing: Listing of close-ended schemes on recognized exchanges is now optional, provided each investor contributes at least USD 10,000.

4️⃣ Other Regulatory Updates

✅ Custodian Requirement: Funds in the GIFT IFSC must appoint a custodian, subject to exceptions.
✅ Temporary Investments: Now allowed in bank deposits or overnight schemes.
✅ Portfolio Management Services (PMS): Minimum investment ticket size lowered from USD 150,000 to USD 75,000.

📌 Key Takeaway

These regulatory updates enhance operational flexibility and aim to boost the attractiveness of GIFT IFSC for fund managers and investors.

international financial services centres authority registered fme’ collective experience considers 3️⃣ retail schemes✅ track record evaluation -year experience requirement count transaction advisory deal due diligence fund management consultancy experience relevant experience 15 years po principal officer graduate degree suffices valid qualifications accepted frm certifications cfa year years postgraduate diploma duration requirement reduced 📌 qualifications & experience amendments group inform ifsca post-appointment ✅ scheme listing close-ended schemes attractiveness boost aim 📌 key takeawaythese regulatory updates enhance operational flexibility usd 75 usd 150 minimum investment ticket size lowered pms ✅ portfolio management services overnight schemes bank deposits allowed ✅ temporary investments exceptions custodian funds regulatory updates✅ custodian requirement 4️⃣ usd 10 investor contributes provided optional recognized exchanges listing longer required prior approval ✅ kmp appointments ✅ fme contribution 12 months minimum reaching usd 1 million commence investments open-ended schemes usd 3 million usd 5 million reduced ✅ minimum scheme corpus venture capital schemes & aifs -retail schemes 🔹 key amendments1️⃣ gift ifsc funds operating bring significant december 2024 proposals revisions align effective february 19 fund management regulations introduced key updates ifsca fund management entities fmes contribute 100% certifications obtain ifsca- fme employees ✅ employee certification kmp additional key managerial personnel appoint usd 1 billion fmes managing aum fmes✅ kmp requirement 2️⃣ manpower & qualification requirements fund managers related individuals ✅ joint investments single company - investment capped india -residents associates fme subject corpus scheme’ permitted investors