IFSCA (Fund Management) Regulations, 2025Amended in 2026Chapter III · Schemes for Fund Management
Chapter III · Schemes for Fund Management
Regulation 52 – Contribution by the FME in the scheme
Amended 2026 Critical importance about 3 min
Retail schemes: Launch process, investor protection, concentration limits and disclosure for retail schemes.
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In plain English
FME/ must contribute at least 1% of the ">Retail scheme (subject to the regulation's detailed conditions); as amended, the non-mandatory exemptions now expressly cover relocated schemes, qualifying fund-of-funds, index schemes, and index/passive-ETF fund-of-funds.
In plain English
≥1% of AUM or USD 200,000 (lower)
Retail — FME contribution
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The rule, in its own words
Read the exact text of Regulation 52
52. (1) Under a retail scheme, the FME or its associate shall invest at least one per cent. (1%) of the AUM of the retail scheme or USD 200,000, whichever is lower: 40[Provided that the contribution by the FME or its associate shall not be mandatory in case of – (i) relocated schemes established or incorporated or registered outside India to IFSC; (ii) a fund of funds scheme investing in scheme(s) with similar requirements, wherein the scheme in IFSC does not involve active management by the FME and the details of inter-se allocation of the underlying scheme(s) are disclosed in the offer document of the scheme; (iii) an index scheme; or (iv) a fund of funds scheme investing only in index sch…
Show the full text
52. (1) Under a retail scheme, the FME or its associate shall invest at least one per cent. (1%) of the AUM of the retail scheme or USD 200,000, whichever is lower: 40[Provided that the contribution by the FME or its associate shall not be mandatory in case of – (i) relocated schemes established or incorporated or registered outside India to IFSC; (ii) a fund of funds scheme investing in scheme(s) with similar requirements, wherein the scheme in IFSC does not involve active management by the FME and the details of inter-se allocation of the underlying scheme(s) are disclosed in the offer document of the scheme; (iii) an index scheme; or (iv) a fund of funds scheme investing only in index schemes or passive ETFs, and the details of inter-se allocation of the underlying scheme(s) are disclosed in the offer document of the scheme.] (2) The said contribution shall be made by the FME or its associate within forty-five (45) days and be maintained on ongoing basis: Provided that the period of forty-five (45) days may be extended subject to the satisfaction of the Authority. (3) The said contribution, if brought in by FME, may be taken into consideration for the purpose of net-worth requirements as 41[specified under these regulations].
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.
Amendment history (2 notes)
Footnotes from the consolidated text. They record earlier wording and are not operative law.
40 Substituted by the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026, w.e.f. September 10, 2026. Prior to the substitution, it read as-- “Provided that the contribution by the FME or its associate shall not be mandatory in case of relocated funds /schemes established or incorporated or registered outside India to IFSC. Provided further that the contribution by the FME or its associate shall not be mandatory in case of a fund of funds scheme investing in scheme(s) which has similar requirements.”
41 Substituted by the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026, w.e.f. September 10, 2026.
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Exceptions and conditions
Taken from the wording of this provision — the carve-outs and conditions worth reading closely.
(1%) of the AUM of the retail scheme or USD 200,000, whichever is lower: 40[Provided that the contribution by the FME or its associate shall not be mandatory in case of – (i) relocated schemes established or incorporated or registered outside India to IFSC
or (iv) a fund of funds scheme investing only in index schemes or passive ETFs, and the details of inter-se allocation of the underlying scheme(s) are disclosed in the offer document of the scheme.] (2) The said contribution shall be made by the FME or its associate within forty-five (45) days and be maintained on ongoing basis: Provided that the period of forty-five (45) days may be extended subject to the satisfaction of the Authority
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What this means in practice
Compliance actions
Applies to
Retail scheme
Frequency
At scheme launch; monitored through scheme life
Evidence
Contribution computation workpaper; Scheme classification documentation for exemption claims
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What changed in 2026
FME/associate contribution not mandatory for Retail schemes in four cases: (i) schemes relocated to IFSC from outside India; (ii) fund-of-funds with similar requirements, no active IFSC management, inter-se allocation disclosed in offer document; (iii) index schemes; (iv) fund-of-funds investing only in index schemes/passive ETFs with inter-se allocation disclosed.
Practical effect
Consolidates and extends the Retail scheme contribution-exemption list to expressly cover index schemes and index/passive-ETF fund-of-funds (mirroring the Reg 40 changes for Restricted schemes).
What to do
Re-map Retail schemes against the four exemption categories to confirm contribution mandatory/non-mandatory status.
Same "detailed under Chapter II" to "specified under these regulations" fix as items 12/23, applied to Reg 52.
