IFSCA Approves Amendments to The IFSCA (Fund Management) Regulations, 2025

The International Financial Services Centres Authority (IFSCA) at its 26th meeting held on December 22, 2025, approved certain amendments to the International Financial Services Centres (Fund Management) Regulations, 2025 (FM Regulations) that were proposed vide consultation paper dated October 17, 2025. These amendments seek to rationalise regulatory requirements, address practical difficulties encountered by fund management entities (FMEs), based out of the Gujarat International Finance Tec-City International Financial Services Centre (GIFT City IFSC) and further IFSCA’s objective of promoting ease of doing business while safeguarding investor interests within the International Financial Services Centre (IFSC) ecosystem.

Key amendments to the FM Regulations approved by the IFSCA are outlined below:

• Revised Eligibility Criteria for KMPs

1. 1. In addition to the prevailing experience-based eligibility criteria, the amendments introduce a certification-based alternative eligibility criterion with a reduced work experience in a financial institution in GIFT City IFSC, India or any foreign jurisdiction.

1. 2. The scope of eligible organisations for determining the work experience required for appointment of key managerial personnels (KMPs) is expanded to include consulting / advisory firms and private or public companies where the nature of work is similar or related to that of an institution in the financial industry, and such expanded scope shall apply to both the existing and newly introduced alternative eligibility criteria.

• Flexibility with respect to validity of Private Placement Memorandum: 

1. 1. Under the extant regulatory framework, FMEs launching a venture capital scheme or a restricted (non‑retail) scheme are permitted a one‑time six‑month extension of the validity of their private placement memoranda (PPMs) if they fail to achieve the minimum corpus within 12 months from the date on which IFSCA takes the PPM on record. In order to provide greater operational flexibility, the IFSCA has approved replacing this one‑time extension with a facility for multiple six‑month extensions of PPM validity, subject to payment of the prescribed fee to the IFSCA for each such extension and submission of an extension request during the validity of the PPM.

1. 2. A one-time extension window of three months will be available to: (I) venture capital schemes and restricted schemes whose PPMs have expired, including those open-ended schemes that have commenced investment activities upon raising a corpus of USD 1,000,000 but have failed to achieve the minimum corpus of USD 3,000,000 within the scheme tenure.

1. 3. Recognizing the heightened risk profile of open-ended schemes that commence investment activities before achieving the minimum corpus of USD 3,000,000, the IFSCA intends to introduce specific investor protection provisions to address such risks as part of forthcoming amendments.

• Custodian migration window for FMEs: FMEs required to appoint an IFSC-based custodian shall be provided with a 24-month migration window, subject to applicable conditions.

Conclusion

Through these amendments, the IFSCA has adopted a calibrated and pragmatic approach aimed at reducing regulatory friction and enhancing operational flexibility for FMEs operating within the IFSC. The IFSCA is expected to notify the corresponding amendment regulations and/or circulars in due course.