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REGD. No. D. L.-33004/99
The Gazette of India
CG-GJ-E-31072025-265126
EXTRAORDINARY
PART III—Section 4
PUBLISHED BY AUTHORITY
NEW DELHI, WEDNESDAY, JULY 30, 2025/SHRAVANA 8, 1947
5126 GI/2025
(1)
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
NOTIFICATION
Gandhinagar, the 24th July, 2025
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (FUND MANAGEMENT) (AMENDMENT)
REGULATIONS, 2025
IFSCA/GN/2025/007.—In exercise of the powers conferred by sub-section (1) of Section 28 read with
sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres
Authority Act, 2019, and Section 28C of the Securities and Exchange Board of India Act, 1992, the International
Financial Services Centres Authority hereby makes the following regulations, further to amend the International
Financial Services Centres Authority (Fund Management) Regulations, 2025, (hereinafter referred to as the
principal regulations), namely: -
1. (1) These regulations may be called the International Financial Services Centres Authority (Fund Management)
(Amendment) Regulations, 2025.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In Chapter VI titled 'OTHER FUND MANAGEMENT ACTIVITIES', after regulation 107 of the principal
regulations, the following Part shall be inserted, namely:-
"
PART D: THIRD-PARTY FUND MANAGEMENT SERVICES
107A. A FME may launch a scheme on behalf of a third-party in accordance with the provisions of this Part.
Definitions
107B. For the purpose of this Part:
i. "third-party fund management services” or “third-party fund management arrangement" refers to the
activity wherein a Registered FME manages the schemes on behalf of a third-party;
ii. "third-party fund manager" means and includes an entity registered or regulated, for the purposes of
fund management, portfolio management, investment advisory or any other similar activity, by
whatever name called, with the concerned financial sector regulator in the country of its incorporation,
and which avails the third-party fund management services from a Registered FME.
Obligation to seek Authorisation and compliances
107C. (1) A FME intending to set up and manage schemes on behalf of a third-party shall seek authorisation from
the Authority under this Part for undertaking third-party fund management services in accordance with the
terms and conditions specified in this Part and shall comply with other conditions as may be specified by
the Authority from time to time.
Explanation. -– Such FME may also set up schemes, offer Portfolio Management Services or carry out other
activities as permitted under these regulations, as per the category of its registration, wherein a third-party
fund management arrangement is not involved.
(2) The FME shall be responsible for strengthening its overall compliance function and shall deploy
resources commensurate to the size of its operations in the IFSC, so as to ensure adequate focus on the
compliance for each scheme.
(3) The FME and the fiduciaries shall ensure compliance with this Part.
(4) Notwithstanding any arrangement of FME with the third-party including the indemnification
arrangement, the FME shall continue to be liable for any and all obligations or liabilities arising in
connection with the third-party fund management arrangement.
Legal Form of the FME
107D. (1) The FME seeking authorisation under this Part shall be set up in the IFSC in the form of a company,
limited liability partnership (LLP) or any other form as may be permitted by the Authority.
(2) In case of a company, its memorandum of association, and in case of a LLP, its limited liability
partnership agreement, shall contain a provision enabling it to offer third-party fund management services.
Appointment of Principal Officers and other Key managerial personnel
107E. (1) For each scheme managed under the third-party fund management arrangement, the FME shall appoint
a dedicated person as the Principal Officer who shall be responsible for the overall activities with respect to
that scheme, including but not limited to fund management, risk management and compliance.
(2) In case of a Registered FME (Non-Retail), the Compliance Officer for its self-managed schemes or
Portfolio Management Services may also act as the Compliance Officer for the schemes managed under the
third-party fund management arrangement.
(3) In case of a Registered FME (Retail), the Compliance Officer for its Retail Schemes shall be separate
from the Compliance Officer for the Non-Retail Schemes that are either self-managed or managed through
third-party fund management arrangement.
(4) For appointment of additional KMP in terms of sub-regulation (4) of regulation 7, the AUM of the
schemes managed under the third-party fund management arrangement shall also be considered, excluding
the AUM of fund of funds schemes managed under third-party fund management arrangement.
(5) Any appointment or changes in the KMPs appointed under sub-regulations (1) and (3) of this regulation
shall be carried out in the manner specified by the Authority.
Net worth requirement
107F. A FME seeking authorisation to offer third-party fund management services shall, at all times, maintain an
additional net worth of USD 500,000 or such other amount as may be specified by the Authority;
Explanation. – Such net worth shall be separate and in addition to:
(i) the minimum net worth requirements applicable for its activities as a FME for the schemes,
Portfolio Management Services or any other activities as permitted under these regulations as per
the category of its registration, wherein a third-party fund management arrangement is not
involved; and
(ii) the minimum net worth requirements applicable for any other activities within or outside the
IFSC.
Schemes under third-party fund management arrangement
107G. (1) A FME shall manage Restricted Schemes under third-party fund management arrangement in
accordance with and in the manner as specified under Part B of Chapter III of these regulations:
Provided that such scheme does not exceed the corpus of USD 50 million or such other value as may be
specified by the Authority.
(2) The third-party, under the third-party fund management arrangement, shall be deemed to be an
associate of the FME for the purpose of compliance with the requirements specified under sub-regulation 3
of regulation 35, sub-regulation 4 of regulation 35 and regulation 40.
Eligibility of 'third-party'
107H. A FME may provide third-party fund management services only to such third-party who is a third-party
fund manager and meets the following criteria, namely:
(a) It is incorporated either in India, IFSC or a foreign jurisdiction;
(b) It allocates adequate resources to discharge its functions;
(c) The persons responsible for its functions have adequate and requisite experience; and,
(d) The third-party, its officers, directors/ partners/ designated partners, key managerial personnel and
controlling shareholders are 'fit and proper' persons in terms of regulation 9.
Explanation.- A third-party fund manager shall be eligible to avail third-party fund management services
even if its ultimate or interim parent entity is not engaged in the fund management activities.
Disclosures to investors
107I. For the Restricted Schemes that are managed under the third-party fund management services, besides
making disclosures under regulation 36, the FME shall make the following disclosures under a separate
head / section at a prominent place in the placement memorandum:
(a) Details of the third-party and the persons who effectively conduct the business of such third-party;
(b) Details of the segregated responsibilities of the FME and such third-party;
(c) Potential conflicts of interest that may arise due to the third-party fund management arrangement
along with the measures proposed to avoid, resolve and mitigate such conflicts; and
(d) such other disclosures as may be specified by the Authority.
Risk Management
107J. The FMEs shall have the following risk management measures in place:
(a) An internal policy comprising of a comprehensive risk management framework to identify and
address the unique risks associated with third-party fund management and conflicts emerging from
the same;
(b) Segregation of funds and operational independence for all the schemes, whether under self-
management or third-party fund management;
(c) Existing mechanism to address the investors' complaints and disputes is extended to the complaints
and disputes of the investors of the schemes under third-party fund management arrangement;
(d) An internal policy for conducting periodic internal audits and reviews to ensure compliances with
the regulatory requirements with respect to third-party fund management; and the submission of the
report thereon to the fiduciaries; and
(e) Such other measures as may be specified by the Authority.
Other obligations of the FME
107K. (1) It shall be the duty of the FME to ensure that-
(a) the third-party meets the eligibility criteria as specified under regulation 107H;
(b) the schemes set up by the FME under the third-party fund management arrangement are treated to
be the schemes of the FME;
(c) the liability of the FME towards any Restricted Scheme and its investors is not affected due to the
third-party fund management services;
(d) the third-party is qualified and capable of undertaking the entrusted functions, and that such third-
party was onboarded with due care and caution;
(e) the activities undertaken by the third-party are monitored by the FME and in doing so, the FME may
issue such instructions to such third-party as it may deem necessary;
(f) the third-party fund management arrangement enables the FME to terminate the arrangement at any
time, in the interest of investors or on the directions of the Authority;
(g) it reviews the services rendered by each third-party on an ongoing basis and periodically shares
these reports with the respective fiduciaries;
(h) a suitable indemnity mechanism is in place which requires the third-party to indemnify the FME
from any potential liabilities arising from the funds managed under the third-party fund
management arrangement;
(i) it pays such fees within such timelines as specified by the Authority, and
(j) such other requirements as may be specified by the Authority.
(2) The FME shall be responsible for all the acts of omissions and commission of the third-party in relation
to the third-party fund management services;
Miscellaneous
107L. All other relevant provisions of these regulations including the circulars or guidelines, if any, issued
thereunder, unless specified otherwise, shall mutatis mutandis apply to the FMEs authorised under this Part
for the schemes managed under the third-party fund management arrangement.
107M. This part shall not be applicable to such schemes of FME wherein the parent entity or any associate of the
FME provides any fund management related support or advice to the FME."
K. RAJARAMAN, Chairperson
[ADVT.-III/4/Exty./265/2025-26]
Note:
1. The International Financial Services Centres Authority (Fund Management) Regulations, 2025, the principal
regulations, were published in the Gazette of India on February 13, 2025 vide F. No. IFSCA/GN/2025/002.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054. GORAKHA NATH
YADAVA
Digitally signed by GORAKHA
NATH YADAVA
Date: 2025.07.31 16:22:10+05'30'