FME Regulatory Intelligence, Learning & Practice · IFSCA (Fund Management) Regulations, 2025
Auditor’s report

Regulation 135

Auditor’s report

IFSCA (Fund Management) Regulations, 2025Amended in 2026Chapter VIII · General Obligations and Responsibilities

Chapter VIII · General Obligations and Responsibilities

Regulation 135 – Auditor’s report
Amended 2026 Critical importance about 3 min

Ongoing obligations & governance: Conduct, reporting, risk, custody, change in control and the day-to-day compliance load.

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In plain English

Every 's annual accounts must be audited by an auditor independent of the FME, appointed by the fiduciaries; the auditor's report forms part of the Annual Report. As amended, this requirement does not apply to FMEs wholly backed by sole Government/Government-related investors.

In plain English
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The rule, in its own words

Read the exact text of Regulation 135
135. (1) Every scheme launched by FME shall have the annual statement of accounts audited by an auditor who is not in any way associated with the FME. 52[Provided that such requirement shall not be applicable for the FMEs which are set up by the Government and Government related investors such as central banks, sovereign wealth funds, international or multilateral organizations or agencies including entities controlled or at least seventy-five per cent. (75%) directly or indirectly owned by such Government and Government related investors wherein such investors are the sole contributors, directly or indirectly, of the schemes launched by such FMEs.] (2) The auditor shall be appointed by the fiduciaries. (3) The auditor shall forward his report to the fiduciaries and such report shall form part of the Annual Report of the schemes.
Statutory text — Principal Regulations, 2025, consolidated as amended up to 10 September 2026 (including the Second Amendment, 2026). The notified Gazette text prevails. Tap a highlighted word for how it functions.
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Exceptions and conditions

Taken from the wording of this provision — the carve-outs and conditions worth reading closely.

52[Provided that such requirement shall not be applicable for the FMEs which are set up by the Government and Government related investors such as central banks, sovereign wealth funds, international or multilateral organizations or agencies including entities controlled or at least seventy-five per cent
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What this means in practice

Compliance actions
Applies to
All FMEs, all schemes (subject to the new sovereign-investor carve-out)
Frequency
Annual
Evidence
Auditor appointment record by fiduciaries; Auditor's report forming part of the Annual Report; Carve-out eligibility assessment (if claimed)
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What changed in 2026

The FME contribution/audit-related requirement under Reg 135(1) does not apply to FMEs set up by Government/Government-related investors (central banks, sovereign wealth funds, international/multilateral organisations or agencies, or entities at least 75% owned/controlled by such investors), where such investors are the sole (direct or indirect) contributors to the FME's schemes.

Practical effect
Creates a sovereign/government-investor carve-out from this requirement for wholly government-backed FME structures.
What to do
Assess whether any FME qualifies for the sovereign/Government-related-investor carve-out based on ownership and sole-contributor status.
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Where it connects

Refers to / depends on

Read alongside

7

Check yourself

Quiz Centre

Test yourself on Regulation 135

3 questions in the unified bank test this regulation. Each explains every option and cites the provision.

The Second Amendment added a carve-out from the scheme audit requirement for which FMEs?
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Your notes

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Ongoing obligations & governance
Regulation 135 Chapter VIII Amended 2026 Critical · about 3 min