The International Financial Services Centres Authority (IFSCA) on September 07, 2026, issued the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026 to further amend the International Financial Services Centres Authority (Fund Management) Regulations, 2025.
The following amendments have been stated:
• In regulation 22 of the principal regulations, in sub-regulation (1), in the proviso, the words and symbol “certificates of deposit,” shall be omitted.
• In regulation 22 of the principal regulations, in sub-regulation (1), after the first proviso, the following proviso shall be inserted, namely: -
“Provided further that any monies received from the contributors prior to the first close of the scheme shall be deployed only in such permissible investments as per sub-regulation (1) of regulation 22 that support preservation of capital and adequate liquidity of the monies deployed, such as bank deposits with option for premature withdrawal, overnight funds, etc., as disclosed by the FME in the placement memorandum.”
• In regulation 23 of the principal regulations, after sub-regulation (4), the following sub-regulation shall be inserted, namely: -
“(5) The FME shall ensure that any differential distribution rights to investors through issuance of senior and junior or subordinate units in a Venture Capital scheme shall be in accordance with the framework as may be specified by the Authority.
Explanation. – “senior units” indicate such class of units which has superior rights over the distribution proceeds of the Venture Capital scheme, while “junior units” or “subordinate units” indicate such classes of units, including mezzanine units, the rights of which over the distribution proceeds of the scheme would be inferior to that of senior units.”
• In regulation 24 of the principal regulations, for the sub-regulations (2) and (3) the following sub-regulations shall be substituted, namely: -
“(2) The FME shall ensure that the Net Asset Value (NAV) is disclosed to the investors at least on a yearly basis, starting from the financial year in which the scheme commences investment activities, excluding investments made in accordance with second proviso to sub-regulation (1) of regulation 22, and within such time period as disclosed in the placement memorandum of the scheme.
(3) The FME shall ensure that the portfolio under the scheme is disclosed to the investors at least on a yearly basis, starting from the financial year in which the scheme commences investment activities, excluding investments made in accordance with second proviso to sub-regulation (1) of regulation 22, within one (1) month of the end of each financial year.”
• In regulation 26 of the principal regulations, in sub-regulation (2), the words “In line with”, shall be substituted with the words “For the purpose of computation and disclosure of NAV to the investors and in line with”.
• In regulation 26 of the principal regulations, in sub-regulation (2), for the existing proviso, the following proviso shall be substituted, namely: -
“Provided that this requirement shall not apply to the investments made by a scheme in other scheme(s), that are regulated by a financial sector regulator, directly or through a manager, in IFSC, India or foreign jurisdiction(s), and valued by any independent entity.”
• In regulation 27 of the principal regulations, in sub-regulation (1), after the words “on an annual basis”, the words and symbol “, starting from the financial year in which the scheme commences investment activities, excluding investments made in accordance with second proviso to sub-regulation (1) of regulation 22” shall be inserted.
They shall come into force on September 07, 2026.
[Notification No. IFSCA/GN/2026/ 015]
