Borrowing
Regulation 37
Borrowing
IFSCA (Fund Management) Regulations, 2025No change in 2026Chapter III · Schemes for Fund Management
Chapter III · Schemes for Fund Management
Regulation 37 – Borrowing
about 3 min
Restricted (non-retail) schemes: The core non-retail scheme regime — corpus, investors, disclosure, valuation and contribution.
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In plain English
Restricted schemes may borrow/leverage subject to PM-disclosed maximum leverage and methodology, with investor consent (two-thirds) needed for any deviation.
In plain English
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The rule, in its own words
Read the exact text of Regulation 37
37. A restricted scheme may borrow funds or engage in leveraging activities, subject to the following conditions:-
(a) The maximum leverage by the scheme, along with the methodology for calculation of leverage, shall be disclosed in the placement memorandum;
(b) The leverage shall be exercised in accordance with the disclosures in the placement memorandum and any deviation therefrom shall be subject to consent of two-thirds (2/3rd) of the investors by value; and
(c) The FME intending to employ leverage shall have a comprehensive risk management framework appropriate to the size, complexity and risk profile of the fund.
Statutory text — Principal Regulations, 2025 (as amended to 30 January 2026), consolidated where amended. 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.
A restricted scheme may borrow funds or engage in leveraging activities, subject to the following conditions:-
(b) The leverage shall be exercised in accordance with the disclosures in the placement memorandum and any deviation therefrom shall be subject to consent of two-thirds (2/3rd) of the investors by value
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What this means in practice
Compliance actions
- Applies to
- Restricted scheme
- Frequency
- Ongoing / event-driven
- Evidence
- PM leverage disclosure; Investor consent record for deviations
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Where it connects
Read alongside
6
Check yourself
Quiz Centre
Test yourself on Regulation 37
2 questions in the unified bank test this regulation. Each explains every option and cites the provision.
Any deviation from the PM-disclosed maximum leverage of a Restricted scheme requires what?
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Your notes
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Restricted (non-retail) schemes