- Extension of timeline for appointment of Custodian under Regulation 132 of the IFSCA (Fund Management) Regulations, 2025
Vide circular bearing number F. No. IFSCA-IF-10PR/7/2024-Capital Markets dated May 24, 2025 issued in exercise of powers under sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with regulation 146 of the International Financial Services Centres Authority (Fund Management) Regulations, 2025, relating to Extension of timeline for appointment of Custodian under Regulation 132 of the IFSCA (Fund Management) Regulations, 2025. The subject circular grants an additional time period of six (6) months from the date of its issuance for the appointment of an independent custodian based in IFSC, if required by Regulation 132. This extension applies to Fund Management Entities (FMEs) in IFSCs concerning specific schemes: those taken on record by the Authority after February 19, 2025, or those taken on record before that date but which had not entered into a custodian agreement as of February 19, 2025. The FMEs will make necessary arrangements to ensure strict compliance with Regulation 132 on or before the expiry of the 6 months. CLICK HERE
- Framework to facilitate Co-investment by Venture Capital Scheme and Restricted Scheme
Vide circular bearing number F. No. IFSCA-AIF/6/2025-Capital Markets dated May 21, 2025 issued in exercise of powers under Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with sub-regulation (1) of regulation 29, sub-regulation (1) of regulation 41 and sub-regulation (1) of regulation 146 of the International Financial Services Centres Authority (Fund Management) Regulations, 2025, establishing a Framework to facilitate Co-investment by Venture Capital Scheme and Restricted Scheme. The Framework provides the mechanism and manner for co-investment through a Special Purpose Vehicle ('SPV'), referred to as a "Special Scheme", and allows such Special Scheme to undertake leverage as disclosed in the placement memorandum.
- The Framework applies to FMEs in IFSCs looking to co-invest through a Special Scheme. An FME with an existing Venture Capital or Restricted Scheme can establish a Special Scheme as a Company, LLP, or Trust under Indian law, classified as Category I, II, or III Alternative Investment Fund ('AIF').
- The Existing Scheme must maintain a minimum of 25% in the Special Scheme at all times. The goal is co-investment aligned with the Existing Scheme's strategy, typically in a single portfolio company, with identical nature and tenure.
- Any person can co-invest, adhering to minimum contribution requirements under FM Regulations. A Term Sheet with necessary disclosures (Annexure A) and a declaration cum undertaking (Annexure B) must be submitted to the Authority within 45 days post-investment. Existing Scheme investors should be notified before seeking capital for the Special Scheme.
- Leverage must adhere to the Existing Scheme's Placement Memorandum limits, and both Existing and Special Scheme investors can encumber ownership interests for financing. The FME retains decision-making authority, and no Special Scheme investor can hinder compliance. KYC is required for new investors, while existing investors are exempt. Other regulatory obligations and relevant SEZ approvals are necessary before submitting the Term Sheet. The circular is effective immediately, as per the IFSCA Act, 2019, and FM Regulations. CLICK HERE
- Participation of IFSC Banking Units in international payment systems
Vide circular bearing number E. File. No. IFSCA - FMPP0BR12/2023/Banking-Part (2) dated May 21, 2025 issued in exercise of powers under Section 18 of the Payment and Settlement Systems Act, 2007 ("PSS Act") read with Section 13 of the International Financial Services Centres Authority Act, 2019 ("IFSCA Act"), relating to Participation of IFSC Banking Units ("IBUs") in international payment systems. The circular lays down policies allowing IBUs to participate in international payment systems for making or receiving payments to/from banks/financial institutions outside IFSC without prior Authority approval, but clarifies that an international payment system permitting payments among IBUs (affecting domestic IFSC transactions) requires authorisation from the Authority under Section 7(1) of the PSS Act. IBUs may participate in such authorised systems for payments with other IBUs without prior approval, after confirming the system's compliance with the authorisation requirement. Further, the circular directs every IBU to review their participation, intimate the Department of Banking Supervision of compliance within 30 days, and share a list of all international payment systems they participated in as of March 31st, 2025. The circular applies to all IFSC Banking Units. CLICK HERE
- IFSCA and NISM sign MoU to strengthen capacity building in GIFT IFSC
Vide press release dated May 2, 2025, relating to the signing of a Memorandum of Understanding (MoU) between the International Financial Services Centres Authority (IFSCA) and the National Institute of Securities Markets (NISM). The MoU was signed to advance capacity building and training initiatives in the securities markets in the IFSC. As part of this collaboration, NISM will partner with IFSCA to support various initiatives, including conducting certification examinations for entities operating in GIFT IFSC, developing customized content, question banks, and e-learning modules aligned with IFSCA's requirements, and conducting examinations for officials of IFSCA, regulated entities, and other market participants. This strategic partnership is aimed at enhancing the professional expertise of financial institutions within the IFSC ecosystem and is an important step towards meeting capacity-building and training needs as part of IFSCA's endeavour to build a world-class securities market ecosystem. CLICK HERE
- Framework to facilitate Co-investment by Existing Schemes at GIFT IFSC
Vide press release dated May 21, 2025, relating to the Framework to facilitate Co-investment by Existing Schemes at GIFT IFSC. The framework operationalises a provision in the recently notified Fund Management Regulations, 2025, which permits co-investment, with or without leverage, through a Special Purpose Vehicle (SPV), also known as a Co-Investment Vehicle (CIV), referred to as the Special Scheme. This framework facilitates such Co-investment by venture capital schemes and restricted schemes. A salient feature is that these special schemes can make investments even before intimating the Authority, as the term sheet of the special scheme can be filed with the Authority within 45 days from the date of investments, thus making the process easier and faster. The framework defines the structure, objective, and nature of such special schemes. This framework is expected to strengthen the GIFT IFSC as a global hub of innovation in fund management and promote ease of doing business at IFSCs. CLICK HERE
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