The International Financial Services Centres Authority (IFSCA) introduced the Fund Management Regulations in 2022, setting up guidelines for retail schemes within IFSCs (International Financial Services Centres). Following recent updates from the Union Budget 2024-25, a few additional clarifications aim to simplify investment limits and enhance the framework for retail schemes in IFSCs.
Investment in Unlisted Securities: Retail schemes can now invest in certain unlisted securities issued by investment funds under specific conditions. If a retail scheme is investing in an open-ended, unlisted security fund that is regulated and available to retail investors in its home country, the following limits do not apply:
Transparency in Fund-of-Fund Schemes: For retail funds structured as fund-of-funds (FOF) schemes, it’s now mandatory to disclose information in the offer document. This includes the specific schemes they plan to invest in and any relationship that the fund management entity (FME) has with the managers of those underlying funds.
Effective Date: This update was issued under the powers provided by the International Financial Services Centres Authority Act, 2019. These clarifications are now in immediate effect, supporting smoother operations for retail investment schemes in IFSCs and encouraging broader participation in global investment opportunities through IFSC retail schemes.
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