On May 24, 2025, IND IFSCA issued extension of timeline for custodian appointment.
IFSCA (fund management) regulations, 2025 requires FMEs to appoint independent custodian to provide custodial services for retail schemes, open ended restricted schemes, and all other schemes managing assets under management above USD 7mn.
Custodian to be appointed must be based in international financial services center, unless local laws of jurisdiction where securities of investee company have been issued mandate appointment of custodian in that jurisdiction; initially 12-month transition.
Additional six months period granted from date of circular issuance for appointment of independent custodian based in IFSC for schemes taken on record by IND IFSCA after the fund management regulations 2025 came into effect on Feb. 19, 2025.
Extension also applies to schemes taken on record by IND IFSCA prior to regs coming into effect but which did not enter into agreement with custodian as of Feb. 19, 2025.
During six-month extension period, FMEs may appoint independent custodian in India or any foreign jurisdiction regulated by financial sector regulator in that jurisdiction.
FMEs must make arrangements to provide information to IND IFSCA when directed.
The six-month extension is effective until Nov. 24, 2025.
In Aug. 2025, IND SEBI proposed to assist resident Indians participation, #265420.
In Sep. 2025, IND IFSCA issued circular regarding the fee structure, see #268447.
On Dec. 21, IND IFSCA approved proposal on review of regulations.
IND IFSCA stated it approved, at a meeting on Dec. 19, the proposal on review of IFSCA (fund management) regulations 2022 and to notify the reviewed regulations.
The overarching principle of registering the fund management entity (FME) with it being permitted to undertake host of fund management activities and the overall reg framework remains same, but changes have been undertaken to usher in the below.
Namely, further ease of doing business, clarify the intent of certain reg provisions and introduce safeguards as are deemed necessary for the protection of investors’ interest.
Key changes in the proposed regulations relate to non-retail schemes (venture capital schemes and restricted schemes); as well as manpower requirements for FMEs.
In addition, changes regarding registered FME (retail) as well as retail schemes.
Proposal includes other key matters, i.e., for schemes required to appoint a custodian.
In addition, IND IFSCA explained that certain provisions with respect to valuation by credit rating agency, restrictions in retail schemes, family investment funds, issued by way of circular in the past, have also been subsumed in the proposed regulations.
Feb. 2025 Approved Regulations Published
On Feb. 19, 2025, IND IFSCA issued the IFSCA (fund management) regulations, 2025.
The regulations were included in the IND GVT official gazette dated Feb. 13, 2025 and are effective from the date of gazettal, implementing the approved proposals above.
The IFSCA (fund management) regulations 2022 are repealed as from Feb. 13, 2025.
IND IFSCA also issued a press release, outlining key features of the new regulations.
Mar. 2025 Transition to 2025 Regulations
On Mar. 26, 2025, IND IFSCA held its 23rd meeting during which it approved the proposal towards one-time opportunity to extend the validity of the private placement memoranda (PPM) whose validity has expired, subject to certain conditions.
IND IFSCA also provided clarification with regard to the filing of the updated private placement memorandum consequent to the changes in the regulations.
In Apr. 2025, IND IFSCA issued circular re reporting requirements, see #249597.
Apr. 2025 PPM Validity
On Apr. 8, 2025, IND IFSCA offered a one-time opportunity to FMEs to extend validity of expired PPMs; FMEs must re-file PPMs within 3 months from the date of the circular.
No material changes are allowed in key aspects such as name, investment objective, strategy, structure, type, except for changes necessary to align with 2025 regulations.
Filing fee equal to 50% of applicable fee for fresh scheme must be paid for re-filing.
Upon receiving a valid request, IND IFSCA will record the revised PPM and provide an additional six-month validity from the date of communication.
Reg 19(4) for venture capital schemes, reg 31(4) for restricted schemes require FMEs to inform IND IFSCA about material changes in the PPM and pay a processing fee.
Processing fee is waived if filing results from IND IFSCA actions or regulatory changes.
On May 24, 2025, IND IFSCA issued extension of timeline for custodian appointment.
IFSCA (fund management) regulations, 2025 requires FMEs to appoint independent custodian to provide custodial services for retail schemes, open ended restricted schemes, and all other schemes managing assets under management above USD 7mn.
Custodian to be appointed must be based in international financial services center, unless local laws of jurisdiction where securities of investee company have been issued mandate appointment of custodian in that jurisdiction; initially 12-month transition.
Additional six months period granted from date of circular issuance for appointment of independent custodian based in IFSC for schemes taken on record by IND IFSCA after the fund management regulations 2025 came into effect on Feb. 19, 2025.
Extension also applies to schemes taken on record by IND IFSCA prior to regs coming into effect but which did not enter into agreement with custodian as of Feb. 19, 2025.
During six-month extension period, FMEs may appoint independent custodian in India or any foreign jurisdiction regulated by financial sector regulator in that jurisdiction.
FMEs must make arrangements to provide information to IND IFSCA when directed.
The six-month extension is effective until Nov. 24, 2025.
In Aug. 2025, IND SEBI proposed to assist resident Indians participation, #265420.
In Sep. 2025, IND IFSCA issued circular regarding the fee structure, see #268447.
Regulators
IND IFSCA
Entity Types
B/D; CRA; Depo; HF; Inv Co
Reference
Cir F. No. IFSCA-IF-10PR/7/2024-Capital Markets, 5/24/2025; Cir F. No. IFSCA-IF-10PR/1/2023-Capital Markets/7, 4/8/2025; PR, Dec, Mt, 3/26/2025; PR, Reg IFSCA/GN/2025/002, 2/19/2025; OG 116, 2/13/2025; PR, 12/21/2024; Mt 12/19/2024;
Functions
Actuarial and Valuation; Client Money; Compliance; HR; Legal; Operations; Registration/Licensing
Countries
India; Cross-Border
Category
State
N/A
Products
CRA; Custody; Fund Mgt; Hedge Funds; Private Placements; Securities
