The International Financial Services Centres Authority (IFSCA) on September 16, 2026, issued a press release regarding the IFSCA (Fund Management) (Second Amendment) Regulations, 2026 to promote ease of doing fund management business in GIFT IFSC, strengthen investor protection and provide greater regulatory clarity. Key changes include permitting annual NAV computation and disclosure for close-ended Restricted Schemes with approval of at least 75% of investors by investment value, relaxing independent valuation requirements for investments in independently valued underlying schemes, and increasing the permissible contribution by FMEs and their associates with Indian ultimate beneficial owners from 10% to 25% for specified VC and Restricted Schemes investing exclusively in IFSC or foreign jurisdictions.
The amendments provide greater flexibility to VC Schemes, Retail Schemes and Fund of Funds Schemes, including allowing VC Schemes to participate in subsequent fundraising rounds after an investee company completes 10 years, subject to conditions, and exempting eligible Fund of Funds Schemes from sectoral concentration limits. Certain government-backed FMEs and schemes may appoint a common auditor, while the ESG disclosure threshold calculation excludes AUM of Fund of Funds Schemes. The deadline for submission of annual scheme reports is also extended from four months to six months from the end of the financial year.
To strengthen investor protection and governance, the amendments expand disclosure requirements for Retail Schemes, require internal policies and frameworks to be approved by the FME's governing body or delegated authority, and permit temporary deployment of scheme funds in specified liquid and capital-preserving instruments before achievement of the minimum corpus, subject to prior disclosure. They also clarify the definition of “associate,” timelines for NAV and portfolio disclosures, and appointment of key service providers including the Fund Administrator, Auditor, Valuer and Custodian.
