Authorised, Registered (Non-Retail) or Registered (Retail): which FME category do you need?

Every fund manager in an IFSC must register with IFSCA as a Fund Management Entity before it starts (Regulation 3). The first decision is the category, because it fixes what you may do, the net worth you must keep and the governance you must build.

The three categories

Authorised FME. May run Venture Capital schemes (offered by private placement to accredited investors or investors meeting the minimum ticket) and a Family Investment Fund for a single family. Minimum net worth: USD 75,000.

Registered FME (Non-Retail). Everything an Authorised FME can do, plus restricted schemes (Category I, II and III), Portfolio Management Services including a multi-family office, and acting as investment manager for privately placed REITs and InvITs. Minimum net worth: USD 500,000.

Registered FME (Retail). Everything above, plus retail schemes open to all investors, ETFs, and investment manager for REITs and InvITs raised by public offer. Minimum net worth: USD 1 million, or USD 2 million where the FME relies on the second track-record route.

What changes as you go up

A Retail FME cannot be an LLP or a branch of an LLP. Its board must have at least four directors, at least half of them independent and not associated with the FME (Regulation 5(4)). It must also show a track record: either five years in fund management with AUM of at least USD 200 million and more than 25,000 investors (the FME, its holding company or their subsidiaries), or persons in control holding at least 25% with five years of experience covering at least 1,000 investors and USD 50 million, together with net worth of USD 2 million (Regulation 6). Before filing its first retail scheme or ETF, it needs a fund management KMP in addition to the Principal Officer and Compliance Officer.

Branches

A branch can register as an FME if its parent is already registered or regulated for similar activity. The parent must ring-fence the branch's operations, and the net worth capital may be held at parent level, earmarked for the branch (Regulation 5).

Net worth is continuous

Net worth must be maintained at all times, not only at registration. IFSCA's February 2024 circular, which continues under Regulation 148(5), means an FME below its minimum cannot launch new schemes, onboard new clients or take on new business until it is restored. Third-party fund management adds USD 500,000 to the requirement.

Choosing well

Choose for the next two to three years, not just the first scheme. Moving up a category later needs IFSCA's prior approval (Regulation 13(2)) and the higher category's net worth, board and KMPs. Equally, registering as Retail "just in case" brings board, KMP and track-record obligations you may not need yet. Try the portal's FME Setup Navigator to map your plans to a category.