KMPs for FMEs: eligibility, the certification deadline and what to do when a post falls vacant

Key managerial personnel sit at the centre of an FME's registration and supervision. Regulation 7 was rewritten with effect from 30 January 2026, and two 2026 circulars added a certification requirement.

Who the KMPs are

Every FME needs a Principal Officer. Registered FMEs also need a Compliance Officer. A Retail FME needs a fund management KMP before it files its first retail scheme or ETF offer document. Once the FME's AUM, excluding fund of funds AUM, is at least USD 1 billion at a financial year end, an additional fund management KMP must be appointed within six months. Continuing that post becomes optional only after two consecutive years below USD 1 billion. All KMPs must be based in IFSC, and investment proposals must be initiated by persons based in the IFSC office.

Eligibility

The standard test is a professional qualification or postgraduate degree in a relevant field, plus at least five years of experience in related activities at an eligible institution. A Compliance Officer with a professional qualification needs three years; for this post an LLB counts as a professional qualification. With a certification specified by IFSCA, a Compliance Officer needs two years of post-qualification experience, and a Principal Officer or fund management KMP needs three. A candidate with 15 or more years of experience may qualify with any graduate degree.

Certification

Under the April 2026 circular, KMPs and employees performing core fund management activities had to complete ICSI's course on the regulatory framework for fund management in IFSC by 30 September 2026. The 10 August 2026 circular accepts the equivalent ICAI course as sufficient. Keep the completion certificates on the HR and compliance file.

Appointments and vacancies

A new KMP is intimated to IFSCA in the Annexure format of the February 2025 KMP circular, with the fee and eligibility evidence. When a KMP post falls vacant, the intimation for the replacement must be filed at the earliest and not later than three months from the vacancy, and the replacement must join within six months. The circular's earlier provision for IFSCA comments within seven working days was omitted from 1 April 2026.

Fit and proper

KMPs, directors and controllers must also meet the fit and proper criteria in Regulation 9: integrity, reputation and character, and none of the listed disqualifications such as a pending charge sheet for an economic offence or an active order restraining dealing in securities.

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