FME Regulations

Explore all 148 regulations of the IFSCA (Fund Management) Regulations, 2025 with plain-English explanations, key points, examples and practical insights.

All Regulations (148)

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This is a learning and compliance-preparation tool. Plain-English readings, practical notes, 'what changed' summaries, the timeline and calculators are the portal's interpretation and do not replace professional advice or the notified Gazette text of the IFSCA (Fund Management) Regulations, 2025 and its amendments.

GIFT IFSC · Rulebook

All 148 regulations

IFSCA (Fund Management) Regulations, 2025, as amended

Every regulation in one place, chapter by chapter, with a plain-English summary, what changed in 2026 and practice questions for each.

The rulebook at a glance

148regulations

12chapters

37amended in 2026

1,092practice questions

Tip: type a number such as 8 to jump straight to that regulation.

Chapter I

Preliminary

Regs 1–2 · 2 regulations · 1 amended

Reg1Short title and commencementNames the regulations and fixes when they take effect.2 questions Reg2DefinitionsSets out the defined terms used throughout the regulations.Amended 202657 questions

Chapter II

Registration of Fund Management Entity (FME)

Regs 3–17 · 15 regulations · 1 amended

Reg3Obligation to seek registrationNo entity can carry on fund management business in the IFSC without first getting an IFSCA Certificate of Registration as an FME under one of the specified categories.15 questions Reg4Eligibility ConditionsA gateway provision: to be registered, the applicant must meet the eligibility conditions set out in the rest of Chapter II (legal form, track record, KMP, net…1 questionReg5Legal form of the applicantFixes the permitted legal forms.15 questions Reg6Track Record and Reputation of FairnessRequires a sound track record and reputation for fairness.11 questions Reg7Appointment of Principal Officers and other Key managerial personnel(s) (KMP)Every FME must designate a Principal Officer responsible for overall fund management, risk management and compliance;Amended 202653 questionsReg8Net worth requirementsAn FME must meet and continuously maintain the minimum net worth prescribed in the Second Schedule (or as otherwise specified by IFSCA) for as long as it holds…12 questionsReg9Fit and proper requirementsThe applicant, its Principal Officer, directors/partners/designated partners, KMPs and controlling shareholders must be, and must remain, 'fit and proper' —…12 questionsReg10Infrastructure RequirementsThe FME must have adequate infrastructure (office space, equipment, communications, manpower) commensurate with its operations, and a dedicated, secured office…4 questionsReg11Furnishing of InformationDuring processing, the Authority may seek further information or clarification, require the applicant to appear in person, and inspect the applicant's office before…2 questionsReg12Consideration of application and Grant of Certificate of RegistrationOn being satisfied and after all information is received, the Authority grants the Certificate of Registration under the appropriate category, subject to payment of…2 questionsReg13Terms and conditions of registrationRegistration is conditional on continuing compliance with the regulations and circulars, and the FME must proactively inform IFSCA of any material change to…6 questionsReg14Rejection of applicationIf the Authority forms the view that registration cannot be granted, it must communicate the deficiencies and give 30 days to rectify.4 questions Reg15Period of validityThe Certificate of Registration is valid for the period specified by the Authority, unless suspended, cancelled, or surrendered and taken on record.2 questions Reg16Surrender of registrationAn FME may apply to surrender its registration.2 questions Reg17Constitution of the Fund / SchemeBefore filing any scheme document, the FME must appoint fiduciaries appropriate to the scheme's legal form — a Board of Directors (company), Designated Partners…16 questions

III

Chapter III

Schemes for Fund Management

Regs 18–60 · 43 regulations · 24 amended

Reg18Venture Capital SchemesA Venture Capital scheme filed under this Part is treated (for Income Tax Act, FEMA and related purposes) as a Category I Alternative Investment Fund 'venture…2 questionsReg19Filing of Placement MemorandumVC schemes are launched via private placement by filing a placement memorandum (with fee) under a 'green channel' — the scheme opens for subscription immediately on…Amended 202615 questionsReg20Eligible InvestorsA VC scheme can have at most 50 investors;18 questionsReg21Nature and structure of SchemeVC schemes must be close-ended with a minimum 3-year tenure disclosed in the PM;8 questionsReg22Permissible investmentsSets out the exhaustive list of instruments/entities a VC scheme may invest in (in IFSC, India or foreign jurisdictions), subject to the amended provisos on…Amended 20267 questionsReg23Restrictions on Investment and Corpus of the SchemePrescribes the minimum VC scheme corpus (USD 3 million, or as specified) and, as amended, permits limited follow-on investment in investee companies more than 10…Amended 202615 questionsReg24Disclosures to investorsRequires the VC scheme placement memorandum to carry material disclosures, and (as amended) sets NAV and portfolio disclosure to investors at least yearly, from the…Amended 20265 questionsReg25BorrowingA VC scheme may borrow or use leverage only within limits and disclosure conditions to be specified/applicable under the regulations.Amended 20263 questions Reg26ValuationFME and fiduciaries must value scheme investments per the Sixth Schedule valuation norms;Amended 20266 questionsReg27Computation of NAVFME must compute VC scheme NAV at least annually;Amended 20262 questionsReg28Contribution by the FME in the schemeThe FME (or its associate) must put its own capital at risk in every VC scheme — as amended, at least 2.5% of corpus or USD 750,000 (whichever is lower), capped at…Amended 202624 questionsReg29Co-investment and LeverageVC schemes may co-invest via an SPV (per an Authority framework) or a segregated portfolio/separate unit class, provided segregated-portfolio investments are on…Amended 202613 questionsReg30Restricted Schemes (Non-Retail Schemes)Restricted Schemes are a flexible, non-retail category launched by Registered FMEs for strategies such as start-ups, SMEs, infrastructure, ESG, special situations…9 questionsReg31Eligible FMEs and Filing of Placement MemorandumRestricted schemes launch via private placement by filing a placement memorandum with fee.Amended 202610 questions Reg32Eligible InvestorsRestricted schemes are capped at 1,000 investors (or as specified);Amended 20267 questionsReg33Nature and Structure of SchemeRestricted schemes may be open- or close-ended;5 questionsReg34Permissible investmentsSets the exhaustive list of permissible investments for Restricted schemes, subject to the amended provisos on certificates of deposit and…Amended 202610 questionsReg35Restrictions on Investment and Corpus of the SchemePrescribes limits on unlisted-securities investment for open-ended Restricted schemes and minimum corpus/timeline requirements;Amended 202615 questionsReg36Disclosures to investorsRequires material PM disclosures for Restricted schemes;Amended 202612 questionsReg37BorrowingRestricted schemes may borrow/leverage subject to PM-disclosed maximum leverage and methodology, with investor consent (two-thirds) needed for any deviation.2 questions Reg38ValuationFME/fiduciaries must value Restricted scheme investments per Sixth Schedule norms, now explicitly tied to NAV purposes, with the same broadened exemption for…Amended 20262 questionsReg39Computation of NAVNAV computation for Restricted schemes: at least monthly generally;Amended 20263 questionsReg40Contribution by the FME in the schemeFME/associate must contribute to every Restricted scheme — as amended, at least 2.5% of corpus or USD 750,000 (close-ended) or at least 5% of corpus or USD 1.5…Amended 202617 questionsReg41Co-investment and LeverageRestricted schemes may co-invest via SPV (per Authority framework) or segregated portfolio, with the same no-more-favourable-terms condition as VC schemes.Amended 20263 questions Reg42Retail SchemesRetail Schemes pool money from the general public (or a section of investors) via an offer document, launched only by Registered FMEs (Retail).2 questions Reg43Eligible FMEs and Filing of Offer DocumentA retail scheme cannot be launched unless a draft offer document is filed with the Authority, with fees, at least 21 working days before launch.9 questions Reg44Minimum number of InvestorsA Retail scheme must have at least 20 investors, with no single investor holding more than 25%, and must achieve this within 6 months of the offer closing.5 questions Reg45Nature and Structure of SchemeRetail schemes may be open- or close-ended;8 questionsReg46Permissible investmentsSets the exhaustive permissible-investment list for Retail schemes, subject to the amended provisos on certificates of deposit and…Amended 20265 questionsReg47Restrictions on Investment and AUM of the SchemeCaps unlisted-securities exposure for open-ended Retail schemes and imposes sectoral concentration limits;Amended 202618 questionsReg48Disclosures to InvestorsRequires the Retail scheme offer document to carry material disclosures;Amended 20265 questionsReg49BorrowingRetail schemes generally cannot borrow, except to meet temporary redemption liquidity needs, capped at 20% of AUM and 6 months' duration.6 questions Reg50ValuationFME/fiduciaries must value Retail scheme investments per Sixth Schedule norms, now explicitly NAV-purpose-linked, with the same broadened exemption for regulated,…Amended 20262 questionsReg51Computation of NAVNAV of every Retail scheme must be computed daily (open-ended) or weekly (close-ended), from the day/week investment activities commence, excluding pre-threshold…Amended 20261 questionReg52Contribution by the FME in the schemeFME/associate must contribute at least 1% of the Retail scheme corpus (subject to the regulation's detailed conditions);Amended 20269 questionsReg53A Registered FME may launch a Special Situation Fund under this Part.2 questions Reg54DefinitionsDefines a "special situation asset" (stressed loans available for acquisition under RBI transfer-of-loan-exposure norms or an IBC resolution plan, security receipts…6 questionsReg55Eligible FMEs and Filing of Placement MemorandumAn SSF is launched by filing a private placement memorandum with fees, under the green channel (open for subscription on the Authority's on-record communication).3 questions Reg56Nature and Structure of SchemeAn SSF must be close-ended, with a minimum tenure of three years disclosed in the PM, extendable by up to two years with two-thirds (by value) investor approval,…4 questionsReg57Permissible InvestmentsAn SSF may invest only in special situation assets.2 questions Reg58Scheme corpus, eligible investors, investment conditionsThe minimum corpus, eligible investors and additional investment conditions for an SSF are as specified by the Authority.2 questions Reg59BorrowingAn SSF cannot borrow or leverage except to meet day-to-day operational requirements.3 questions Reg60Other requirementsFor disclosures, valuation, NAV computation and FME contribution, an SSF follows the rules for a close-ended restricted scheme, and is treated as a category within…4 questions

Chapter IV

Exchange Traded Funds (ETFs)

Regs 61–71 · 11 regulations

Reg61Exchange Traded FundsOnly Registered FMEs (Retail) may launch ETFs, by filing a draft offer document at least 21 working days before launch;11 questionsReg62Equity Index based ETFAn Equity Index ETF must track an index that has at least 10 stocks, with no single stock above 35% (sectoral/thematic) or 25% (other) weightage, and must replicate…8 questionsReg63Debt Index based ETFA Debt Index ETF must track an index of at least 5 issuers, no single issuer above 25% weightage, all constituents investment grade (except Government-securities…7 questionsReg64Commodity based ETFsCommodity-based ETFs must invest at least 90% in the specified commodity/commodity-related instruments, and must designate a KMP with at least 5 years' commodity…3 questionsReg65Gold ETFA Gold ETF must hold at least 90% in gold or gold-backed instruments;10 questionsReg66Silver ETFA Silver ETF follows the same structure as a Gold ETF: at least 90% in silver or silver-backed instruments, ETCD capped at 10% of AUM (except for physical…2 questionsReg67Actively Managed ETFsAn Actively Managed ETF is one where the FME exercises discretion over the portfolio.2 questions Reg68Market MakersThe FME must appoint a market maker to provide two-way quotes and ensure ETF trading liquidity;5 questionsReg69Computation of NAVETF NAV must be computed daily and published on the FME's website and communicated to the listing stock exchange for disclosure;2 questionsReg70Redemption of ETFs to InvestorsBeyond market makers, investors may redeem ETF units directly with the FME with no exit load in defined liquidity-failure situations: a persistent NAV discount…6 questionsReg71Disclosures to investorsThe ETF offer document must include all material investor disclosures — investment objective, target investors, strategy, methodology, fees, risk management…3 questions

Chapter V

Environmental, Social and Governance (ESG)

Reg 72 · 1 regulation · 1 amended

Reg72FMEs managing AUM above USD 3 billion (or another specified threshold) must establish ESG governance policy and related obligations;Amended 202617 questions

Chapter VI

Other Fund Management Activities

Regs 73–107 · 35 regulations · 5 amended

Reg73Eligible FME and ClientsOnly Registered FMEs may offer Portfolio Management Services, and only to specified client categories (persons resident outside India, NRIs, and eligible…7 questionsReg74DisclosuresBefore entering a PMS agreement, the FME must give the client a disclosure document (also posted on its website) covering services, risks, client representation and…4 questionsReg75Portfolio Management Agreement.A PMS relationship requires a written agreement setting out the parties' mutual rights, liabilities and obligations, including objectives, risk factors, fees and…4 questionsReg76Report to the ClientThe FME must periodically report to each PMS client per the agreement, covering portfolio composition and value, transactions, beneficial interest received,…2 questionsReg77Dealing with Client FundsMinimum PMS client commitment is USD 75,000 (waived for accredited investors);10 questionsReg78Investment RestrictionsPMS money must be managed strictly per the client agreement.9 questions Reg79General ObligationsPMS fees must be agreed with the client (fixed, return-based, or combination) without guaranteeing returns;6 questionsReg80Advisory ServicesAn FME may provide advisory services as part of PMS only if it complies with the relevant provisions and code of conduct of the IFSCA (Capital Market…Amended 20266 questionsReg81Multi-Family OfficeAn FME may serve a multi-family office under a PMS agreement, subject to any additional conditions and permissible investments the Authority may specify.Amended 20262 questions Reg82Investment Trust in IFSCsAnyone wanting to operate an Investment Trust (REIT or InvIT) in IFSC must register with the Authority.4 questions Reg83DefinitionsSets out the defined terms for the Investment Trust Part, including holdco, SPV, sponsor, sponsor group, investment manager, trustee, project manager, valuer,…3 questionsReg84RegistrationThe sponsor applies on behalf of the trust in the specified format with a non-refundable fee.2 questions Reg85TrustEligibility for the trust: created under Indian (IFSC or outside) or foreign law;2 questionsReg86SponsorEach sponsor must hold (or propose to hold) at least 5% of units post-initial-offer (a one-year window to cure any dip below 5%), and maintain net worth of at least…10 questionsReg87Investment ManagerFor private placement, any Registered FME may be the Investment Manager;2 questionsReg88TrusteeThe trustee must be authorised/registered as a trustee with the Authority or another securities regulator, must not be an associate of the sponsor or investment…3 questionsReg89Adherence to the Fit and Proper criteria and other responsibilitiesRegistration is granted only if the Investment Trust and all parties are fit and proper.2 questions Reg90CurrencyInvestment Trust units must be denominated only in a freely convertible foreign currency.2 questions Reg91Offer of units of Investment TrustNo initial offer unless the trust is registered, its asset value is at least USD 75 million and the offer size at least USD 35 million.Amended 20267 questions Reg92Private Placement with listingFor private placement with listing: obtain in-principle exchange approval (valid six months), file the PM with fee at least five working days before the issue opens…6 questionsReg93Private Placement without listingFor private placement without listing: file a draft PM with fee at least five working days before the issue opens (opening within three months of the on-record…3 questionsReg94Public IssuesPublic issues follow a detailed IPO-style process: draft offer document filed at least 30 working days before filing with the exchange, 14-day public comment,…12 questionsReg95Offer Document or Placement MemorandumThe offer document or PM must contain material, true, correct and adequate disclosures to enable an informed decision, in the exchange-specified format, covering…2 questionsReg96Continuous obligations and Disclosure RequirementsListed Investment Trusts follow the exchange's continuous obligations.2 questions Reg97Investment ConditionsInvestment conditions for holding through SPVs and holdcos: no other shareholder may block the trust's regulatory compliance (with a dispute-resolution agreement in…10 questionsReg98Additional conditions in case of InvITInvIT-specific conditions: PPP projects must be held through holdco/SPV;6 questionsReg99Additional conditions in case of REITREIT-specific conditions: investments limited to specified real-estate and related assets;8 questionsReg100Distribution policyDistribution policy: SPVs distribute at least 90% of net distributable cash flows to the trust/holdco;6 questionsReg101Borrowings and deferred paymentsListed Investment Trusts may issue listed debt securities and are subject to aggregate borrowing/deferred-payment limits.9 questions Reg102Valuation of assetsInvestment Trust assets require a full valuation at least once a year (within 2 months of the March 31 FY-end) and a half-yearly valuation as at September 30 for…10 questionsReg103Surrender of certificate by an Investment Trust whose units are not listedAn unlisted Investment Trust may surrender its registration;2 questionsReg104Eligibility ConditionsFamily Investment Funds are exempt from the standard FME legal-form (Reg 5) and net-worth (Reg 8) requirements, must reach USD 10 million minimum investment within…Amended 202613 questionsReg105Permissible ActivitiesA Family Investment Fund may undertake all activities related to managing the family's investment fund, and any other activity the Authority specifies.Amended 20261 question Reg106Permissible investmentsSets the permissible investments for a Family Investment Fund (unlisted and listed securities, money-market instruments, debt, securitised debt, units of schemes,…3 questionsReg107BorrowingA Family Investment Fund may borrow and use leverage as per its risk-management policy.33 questions

VII

Chapter VII

Listing

Regs 108–117 · 10 regulations

Reg108Listing of open-ended schemesAn FME may list its open-ended schemes on recognised stock exchanges.3 questions Reg109Listing of close ended schemeAn FME may list close-ended schemes;2 questionsReg110Listing of ETFsETF units must be listed on at least one recognised stock exchange.2 questions Reg111Listing of Investment TrustInvestment Trust units (except unlisted private placements) must be listed within specified timelines (12 working days from IPO closure;5 questionsReg112Approval by Recognised Stock Exchange for ListingAn FME listing a scheme, ETF or Investment Trust must obtain in-principle approval from the recognised stock exchange;2 questionsReg113DisclosuresListed schemes, ETFs and Investment Trusts must make the disclosures specified by the Authority or the exchange.2 questions Reg114Secondary Listing of an ETF or Investment Trust listed in India or Foreign JurisdictionAn ETF or Investment Trust already listed in India (outside IFSC) or a foreign jurisdiction may seek secondary listing on an IFSC exchange if it complies with its…2 questionsReg115Suspension of Listing and TradingThe Authority or exchange may suspend listing/trading for non-compliance, suspension elsewhere, or to ensure orderly markets, and may restore it when no longer required.2 questions Reg116Delisting by Recognised Stock ExchangeThe exchange may delist an Investment Trust, scheme or ETF on specified grounds (prolonged suspension, loss of eligibility, compulsory delisting elsewhere, special…3 questionsReg117Voluntary DelistingThe exchange may delist a scheme, ETF or Investment Trust on request from the trust or FME, in the manner it or the Authority provides.2 questions

VIII

Chapter VIII

General Obligations and Responsibilities

Regs 118–137 · 20 regulations · 5 amended

Reg118Code of ConductEvery FME, its fiduciaries and KMPs (including the Principal Officer, fund managers and the designated Compliance Officer) must abide by the Code of Conduct in the…3 questionsReg119Maintenance of books of account, records and other documentsEvery FME must keep proper books of account, records and documents per scheme to explain transactions and disclose financial position at any time;Amended 20269 questionsReg120Information to the AuthorityThe FME, its fiduciaries and any involved person must furnish reports, returns, statements and particulars accurately and on time, in the manner and intervals the…14 questionsReg121Business Continuity PlanA registered FME must maintain a business continuity plan for emergencies and significant disruption, update it on any material change, and review it annually.3 questions Reg122Cyber Security and Cyber ResilienceA registered FME must maintain a robust cyber security and cyber resilience framework per the Authority's requirements.2 questions Reg123Risk Management and Internal ControlsA FME must have a sound risk-management system covering all risks and adequate internal procedures and controls (including for outsourced activities) to protect…2 questionsReg124Guaranteed returnsNo guaranteed return may be offered in a scheme or PMS unless the return is fully guaranteed by the FME, the guarantee and its details are stated in the offer…5 questionsReg125Change in controlA FME must obtain the Authority's prior approval for any direct or indirect change in its control;6 questionsReg126Payment of FeesA FME must pay annual fees, scheme filing fees and any other fees the Authority specifies.2 questions Reg127AdvertisementsAny advertisement issued by a FME must conform to the Advertisement Code in the Fifth Schedule.3 questions Reg128Fees and Expenses of the Schemes.All fees and expenses must be identified and appropriated separately for each scheme, with maximum fees and expenses disclosed in the offer document/PM, each…2 questionsReg129Appointment of Investment CommitteeA FME may constitute an Investment Committee to make investment decisions;3 questionsReg130Merger, demerger or restructuring of schemesMerger, demerger and restructuring of schemes require the Authority's prior approval and must follow the conditions it specifies.3 questions Reg131Winding up of the SchemeA scheme may be wound up on tenure expiry, on a 75%-by-value investor resolution, or (inserted by the January 2026 amendment) where the FME raised funds but failed…7 questionsReg132Appointment of CustodianThe FME must appoint an independent custodian for retail schemes, open-ended restricted schemes, and all other schemes with AUM above USD 70 million (fund-of-funds…Amended 202611 questionsReg133Redemption of Close ended schemeA close-ended scheme must be fully redeemed at the end of its maturity period unless its tenure is extended as permitted.2 questions Reg134Scheme Annual ReportFMEs must prepare a Scheme Annual Report (with abridged summary) for each FY;Amended 20265 questionsReg135Auditor’s reportEvery scheme's annual accounts must be audited by an auditor independent of the FME, appointed by the fiduciaries;Amended 20263 questionsReg136Other disclosures to the investorsThe FME must give investors information about their holdings at each month-end, and within ten working days of an investor's request;Amended 20264 questionsReg137Restrictions on business activities of the FMEA FME cannot undertake business activities beyond those permitted without the Authority's prior approval.4 questions

Chapter IX

Inspection and Audit

Regs 138–142 · 5 regulations

Reg138InspectionThe Authority may, on its own motion or on information/complaint, appoint an Inspecting Authority to inspect an FME's books, records, systems and procedures for the…4 questionsReg139Obligations of FME on inspectionOn inspection, the FME and every officer, KMP, fiduciary, employee and agent must cooperate fully, furnish books and records within the time set, allow reasonable…3 questionsReg140Appointment of auditor or valuerThe Authority may appoint an auditor (with inspecting-authority powers) or a valuer to examine the FME's records/systems or value scheme assets, and may recover the…2 questionsReg141Submission of reportThe Inspecting Authority submits its report (and, if directed, an interim report) to the Authority, which may act on it as it sees fit.2 questions Reg142Action by the Authority upon inspection.After considering the inspection report and giving a hearing, the Authority may direct the FME (or its officers) as it sees fit, including barring new schemes or…3 questions

Chapter X

Liability for Action in Case of Default

Reg 143 · 1 regulation

Reg143Suspension, cancellation of registration or any other actionsThe Authority may take action, including suspension or cancellation of registration, where an FME fails to exercise due diligence or meet registration conditions,…5 questions

Chapter XI

Power to Relax, Issue Clarifications and Specify Additional Requirements

Regs 144–146 · 3 regulations

Reg144Power to relax strict enforcement of the regulationsThe Authority may, for recorded reasons and in the interest of market development, relax strict enforcement of any requirement;3 questionsReg145Regulatory or Innovation Sandbox and Fund LabThe Authority may exempt a person or class from any requirement for up to 18 months to test new products, strategies, processes or technology in a…2 questionsReg146Power to specify norms, procedures, issue clarifications and remove difficultiesThe Authority may specify norms, procedures and additional requirements through circulars, guidelines or directions, and may issue guidance notes/circulars to…7 questions

XII

Chapter XII

Miscellaneous

Regs 147–148 · 2 regulations

Reg147Delegation of powersThe Authority's powers under these regulations may also be exercised by any officer to whom they are delegated.2 questions Reg148Repeal and SavingsOn commencement, the 2022 Fund Management Regulations are repealed and two named 2024 circulars are superseded, with savings so that prior actions, applications,…5 questions

Meet the expert

CS Prashant Kumar

Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker

13+ years of experienceFCS Fellow member, ICSIAuthor Audit Under Fire

Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)

Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.

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