GICs Re-Engineered: Key Amendments to the IFSCA (Fund Management) Regulations, 2025 approved at the 26th Authority Meeting of IFSCA

The International Financial Services Centres Authority (“IFSCA”), at its 26th Authority meeting held on December 22, 2025, approved certain amendments to the IFSCA (Fund Management) Regulations, 2025 (“IFSCA FM Regulations, 2025”). These amendments are expected to address operational challenges faced by Fund Management Entities (“FMEs”), enhance regulatory flexibility, and further promote ease of doing business in GIFT International Financial Services Centre (“GIFT IFSC”), while continuing to safeguard investor interests. These amendments broadly reflect proposals set out in a consultation paper issued by IFSCA on October 17, 2025 (“Consultation Paper”).

IFSCA has approved a relaxation in the work experience requirements prescribed under the IFSCA FM Regulations, 2025 for Key Managerial Personnel (“KMPs”) by introducing an alternative certification-based eligibility criterion with a reduced work experience threshold. KMPs who obtain the relevant certification are only required to have work experience of 3 years. In addition, work experience gained in consulting or advisory firms, as well as in private or public companies, shall now be recognised, provided that the nature of such work is similar or related to the functions typically performed within financial institutions. This expanded scope of eligible experience shall apply both to the existing framework based purely on work experience and to the newly introduced alternative certification-based criterion, which has a reduced work experience threshold.

Until now, the validity of the Private Placement Memorandum (“PPM”) of Venture Capital Schemes and Restricted Schemes could be extended only once. Henceforth, FMEs may avail multiple extensions of six months each, subject to payment of the prescribed fees and submission of the extension request while the PPM remains valid.

Further, a one-time extension window of three months has been approved for Venture Capital Schemes and Restricted Schemes whose PPMs have already expired. This extension window shall also be available to open-ended schemes that have commenced investment activities upon raising USD 1 million but have failed to achieve the minimum corpus requirement of USD 3 million within the tenure of the scheme. The press release relating to IFSCA’s meeting held on  December 22, 2025 (“Press Release”) indicates that specific provisions shall be introduced in the IFSCA FM Regulations 2025 to protect the interests of investors in open-ended schemes that commence investments with a reduced initial corpus but do not subsequently meet the prescribed minimum corpus requirement.

The IFSCA FM Regulations 2025 provide that custodians of a) retail schemes, (b) open ended restricted schemes and (c) all other schemes managing AUM above USD 70 Million are required to have a custodian based in IFSC. IFSCA has now granted a migration window of twenty-four months for compliance with this requirement.

The Press Release can be found here.
The Consultation Paper can be found here.

We trust you will find this an interesting read. For any queries or clarifications please write to us at insights@elp-in.com or write to our authors:
Vinod Joseph, Partner – – Email – vinodjoseph@elp-in.com
Akhil Ganatra, Associate – – Email – akhilganatra@elp-in.com