Appointment of Principal Officers and other Key managerial personnel(s) (KMP)

7. (1) The applicant shall designate a principal officer who shall be responsible for overall activities of the FME including but not limited to fund management, risk management and compliance. (2) In case of Registered FME, in addition to the principal officer, one (1) additional KMP shall be designated as Compliance Officer who shall be responsible for compliance with these regulations and ensure implementation of risk management policies and practices at the FME. (3) In case of Registered FME (Retail), the FME shall, in addition to the principal officer and compliance officer, appoint, before filing with the Authority the offer document of its first retail scheme or ETF, an additional KMP who shall be assigned with the responsibility of fund management. (4) Any FME that is managing an AUM of at least USD 1 billion, excluding the AUM of fund of funds schemes, as at the close of a financial year shall, in addition to the principal officer and compliance officer, appoint an additional KMP, who shall be assigned with the responsibility of fund management. Provided that appointment of the additional KMP shall be made within 6 months from the end of such financial year. Provided further that continuation of the additional KMP shall be optional, if the AUM remains below USD 1 billion for any 2 subsequent consecutive financial years and there is a reasonable expectation that the AUM shall not exceed USD 1 billion in the near term: Provided also that FMEs which are set up by 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 investor wherein such investors are the sole contributors, directly or indirectly, of the schemes launched by such FMEs, the appointment of the additional KMP may not be required. (5) The applicant shall ensure that the aforementioned principal officer as specified under sub-regulation (1) and other KMPs as specified under sub-regulations (2), (3) and (4), shall be based out of IFSC and meet the following educational qualification and experience requirements: (a) A professional qualification or post-graduate degree or post graduate diploma (minimum one year in duration) in finance, law, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science from a university or an institution recognised by the Central Government or any State Government or a recognised foreign university or institution or association or a CFA or a FRM from Global Association of Risk Professionals or any other relevant educational qualifications as may be specified by the Authority: Provided that if the principal officer, specified under sub-regulation (1), has a work experience of at least 15 (fifteen) years in the activities related to fund management, including portfolio management, investment advisory or similar activities, the minimum educational qualification required for such person shall be a graduate degree in any field: (b) 3[In addition to the qualifications mentioned under clause (a), an experience of at least five (5) years in related activities in the securities market or financial products in an eligible institution: Provided that for the KMP referred under sub-regulation (2), the experience mentioned in clause (b) shall be required for a minimum period of 3 (three) years, if such KMP possesses a professional qualification: Provided further that an individual with post-qualification experience of at least 2 (two) years in an eligible institution in IFSC, India or any foreign jurisdiction and who holds valid certification(s), as specified by the Authority, shall be considered eligible for the KMP referred under sub-regulation (2): Provided also that individuals with a post-qualification experience of at least 3 (three) years in an eligible institution in IFSC, India or any foreign jurisdiction and who holds valid certification(s), as specified by the Authority, shall be considered eligible for the KMP referred under sub-regulations (1), (3) and (4). Explanation. – For the purposes of this clause, “eligible institution” shall include the following - i) Market Infrastructure Institutions, Capital Market Intermediaries, financial sector regulators, FMEs, Banks, Finance Companies, Insurance Companies, and Insurance Intermediaries in IFSC, and equivalent institutions in India or any foreign jurisdiction; ii) consulting firms / advisory firms / firms of Chartered Accountants / Company Secretaries / Cost Accountants in IFSC, India or any foreign jurisdiction, providing services to the institutions mentioned above in (i), in relation to a financial product; and iii) a company, whether private or public, if the experience is in relation to finance/ accounts/ secretarial/ law departments of such company.] Explanation. – For the purposes of this regulation, the professional qualification shall include membership of Institute of Chartered Accountants of India, Institute of Company Secretaries of India, Institute of Cost Accountants of India or any institution equivalent thereto in a foreign jurisdiction, and for KMP referred under sub-regulation (2) it shall also include Bachelor of Laws (LLB) from a university or an institution recognised by the Central Government or any State Government or a recognised foreign university or institution or association. (6) The employees of FME, shall undergo such certification courses from such institutions, as may be specified by the Authority. (7) The proposal on the portfolio composition of a fund shall be initiated by a person who is based in the office of the FME in the IFSC. (8) The FME shall appoint other personnel commensurate with the size of its operations and activities. (9) Any appointment and changes to the KMPs appointed under sub-regulation (1), (2), (3) and (4) of this regulation shall take place only in the manner as specified by the Authority.