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GIFT-IFSC is rapidly gaining recognition in the international financial services sector of India. There is a need for a well-regulated environment to promote growth for various international investors and fund management institutions. IFSCA, acting as a single regulator. It ensures all approvals, applications, consolidated policies, and supervision under one consolidated framework.
The Fund Management Regulations issued in 2022 created a uniform framework for the first time. Those policies were re-evaluated, and new revised policies were approved in 2025 with the increase in the scope of the market over time. The new IFSCA (Fund Management) Regulations, 2025, aim to ensure a simpler business environment, transparency, and a world-class investment framework.
The IFSCA (Fund Management) Regulations, 2025, bring the fund management activities conducted in GIFT-IFSC under one segment. Earlier, different regulations were administered through separate agencies. So, the applicant institutions had to face multiple approvals. The revised framework removes that hurdle and creates a single regulatory framework.
Although the 2022 rules simplified the approval process, the rapid growth of investment activity necessitated a more flexible policy. But in 2025, the revised policy reduced the minimum fund size, extended the time frame, expanded investor opportunities, and improved the risk-based management structure of large Fund Management Entities (FMEs). The IFSCA (Fund Management) Regulations, 2025, have created a more conducive environment for starting a business, launching schemes, and attracting international investment.
If you have a dream to register an AIF in Gift City (an IFSC), understanding the IFSCA (Fund Management) Regulations, 2025 is crucial.
IFSC has shown significant growth in the fund management sector in the last few years.
As per the data till September 2024, the growth trend of the GIFT-IFSC fund industry reflects:
About USD 5.58 billion has been raised so far, and a major portion of it has already been invested. GIFT-IFSC is gradually acquiring the structure of a global investment hub, with the increasing interest of international investors. It is a rapidly expanding sector in terms of fund size, investment type, and number of participating investors.
The IFSCA (Fund Management) Regulations, 2025 majorly aim to modernize the fund management, creating a simpler, more transparent, and globally competitive environment. Look below to know the core objectives.
Look below to know the major regulatory updates under the IFSCA (Fund Management) Regulations, 2025 that streamline fund operations and entry barriers, within the non-retail schemes.
Certain changes are applied to the non-retail schemes with reduction in corpus, extend invalidity period, and joint venture structures. Look below and read more.
Reduction in Minimum Corpus (USD 5M → USD 3M)
The minimum corpus in non-retail schemes has been reduced from USD 5 million to USD 3 million. This will make it easier to start early-stage funds, especially startup-focused venture funds. The opportunity to launch schemes with less capital allows small-scale FMEs to raise investments faster.
Increase in the Validity period of PPM to 12 months
Earlier, PPM was valid for only 6 months, but now it will be valid for 12 months. This reduces the cost of refilling documents and gives the fund manager more time to launch the scheme. The time for discussions, sharing, and reaching a decision with new investors is also increased.
Addition of a joint investor structure
Two individuals have been recognized as joint investors. If they are family members such as spouses, children, or parents, they can jointly meet the minimum investment standard. This has made it easier for individual investors to participate.
Strict approval for inter-scheme transfer
Now, 75% investor consent is required to transfer securities within the scheme or with related institutions. This system will ensure transparency and control the influence of large unit holders.
There are various amendments in the retail schemes for IFSCA (Fund Management) Regulations, 2025 that reform to retail schemes, aiming to ease entry barriers, increase participation, and strengthen the credibility of fund managers.
Earlier, retail-facing FMEs had to show experience in previously managed funds. Now, the experience of group companies is also being counted. So, new entities will also be able to use their own business network and group expertise.
If the FME has fewer assets under management or a smaller number of investors, then the experience of large shareholders will be considered. However, there is a condition for increasing the net worth of the FME against this.
It will be possible to launch the scheme with less capital without being forced to raise large capital like before. This will accelerate the initiatives of new FMCs.
As the scheme is launched with low capital, new investment products will come to the market, and access opportunities for retail investors will increase. It will be easier to test products on a small scale, assess market response, and gradually increase funds.
The key changes in the IFSCA (Fund Management) Regulations, 2025 also strengthen the human resources and governance standards for FMEs, for better insights, enhanced skill set, and improved operational resilience.
FMEs whose funds under management exceed USD 1 billion will have to appoint an additional KMP within 6 months. Through this, the operational risk of large institutions will be managed with skilled human resources.
A facility has been provided to appoint a third KMP before the launch of a scheme of retail scheme. There will be no unnecessary staff expenditure before the business starts.
Now, people working in investment banking and credit rating agencies will also be considered eligible. At the same time, the PG Diploma will be eligible for one year instead of two years earlier. So, the scope of employment has been expanded, and it is becoming easier to get skilled manpower.
Certification of IFSCA-approved institutions is now mandatory. This will ensure up-to-date knowledge on regulatory changes, investment risks, compliance, etc. This will play a significant role in investment protection and regulated management.
The revised policy of IFSCA (Fund Management) Regulations, 2025 has further defined the Fit & Proper criteria to ensure responsible investment activities in a regulated environment. Earlier, the disqualification was unclear.
As per the new policy, if a person is charged with financial crime, they will be considered directly disqualified. It brings more transparency and helps in controlling risks. As per market restrictions, an individual must wait an additional three years after the end of the restrictions.
This additional waiting period has now been abolished. So, compliant individuals will be able to return to work earlier.
Key changes:
✔ Direct disqualification if there is a charge sheet for financial crimes
✔ 3-year additional cooling-off period abolished
✔ Increased opportunities for skilled and legitimate individuals
The participation of small investors and family offices has increased as a result of flexible rules in the investment framework. The minimum investment limit for Portfolio Management Services (PMS) was reduced from USD 150,000, to USD 75,000. So, emerging family-based investors or small corporate investors smoothly operate Portfolio Management Services.
In addition, both non-retail and retail schemes can temporarily keep money in bank deposits and overnight funds. It becomes easier to conduct liquidity management while creating an opportunity for risk-free income.
Key Benefits:
✔ PMS reduces investment limits, increasing investor access
✔ Easy liquidity management using Overnight Funds
✔ Creating a low-risk money preservation system due to the addition of bank deposits
✔ Convenient to maintain the status of the scheme during volatile market times
The new policy has further strengthened the human resource structure for fund management entities managing large-scale Assets Under Management (AUM). Companies whose AUM is more than $1 billion will have to appoint additional Key Managerial Personnel (KMP). This will ensure efficient leadership in high-risk management.
The scope of qualifications for the appointment of KMP has also been expanded. Those with investment banking, credit rating agency, or equivalent experience will now be eligible for the post of KMP. In addition, the earlier two-year postgraduate diploma requirement has been reduced to one year. This has further expanded the scope of appointments.
Specific certification has been made mandatory for the staff of FMEs. This certification will have to be obtained through an IFSCA-approved institution. This will increase the skills in rule changes, risk assessment, and international practices. The new rules will strengthen the ability to develop human resources, operate in accordance with the regulatory framework, and provide guidance to investors.
The new rules have more clearly defined fit and proper criteria. If a person is charged with a financial crime or is facing serious financial fraud charges, they will be considered disqualified. This will maintain ethical standards in fund management.
The minimum investment limit for Portfolio Management Services (PMS) has been reduced from USD 150,000 to USD 75,000. This will make it easier for family-based investment institutions and new investors to avail themselves of this service.
The rules have also expanded the scope of investable instruments. Now funds can be kept in bank term deposits and overnight schemes. It will be possible to maintain cash management of the scheme, low-risk income opportunities, and stability in market fluctuations.
These changes have collectively made the fund management environment more efficient and will help in creating new investment structures in the future.
IFSCA (Fund Management) Regulations, 2025, have made the work process easier for FMEs. The reduction in minimum capital, extension of document time, and ease of eligibility criteria have paved the way for launching new funds and schemes.
Protection has been enhanced for investors. Approval of the majority of investors has been made mandatory for inter-scheme transfers, which will ensure transparency and fairness.
In addition, the freedom of the new investment structure will make it possible to create innovative investment models. Everyone will get the opportunity to participate, from small investors to large family offices. This will increase competition in the market and create new investment solutions.
As the new policy has stricter Fit & Proper criteria, personal suitability verification will become important in many cases. If there is an ongoing financial crime or complaint, the institution may have to select alternative leadership.
Some challenges may also arise during the transition period. It will take time to revise the scheme documents, complete certification, and implement the human resource plan.
In the case of large FMEs, additional KMP recruitment, capacity verification, and step-by-step resource allocation for fund management will be required. While the processes will strengthen the management in the long run, there may be some administrative burden initially.
The new IFSCA (Fund Management) Regulations, 2025, have simplified the investment framework and reduced the barriers to business entry. The flexible terms for FMEs, increased investment options, and administrative transparency will accelerate the progress of the industry. The main objective is to establish GIFT-IFSC as a strong investment hub while maintaining investor safety and fairness.
Whether you are looking for help with launching a new scheme, structuring a fund, or regulatory compliance, such as AIF compliance, Enterslice is ready to provide you with complete support. Our expert team will help you quickly implement the right framework as per your needs. Contact us today to take advantage of the new opportunities of GIFT-IFSC.
IFSCA regulations have been amended to make fund management activities in GIFT-IFSC easier, more transparent, and efficient. Based on the 2022 framework, the new regulations focus on streamlining the process, investor protection, and increasing market participation. This will increase the scope and efficiency of both retail and non-retail funds in line with international standards.
Earlier, the minimum corpus for both retail and non-retail schemes was USD 5 million. In the new rules, it has been reduced to USD 3 million. So, it will be possible to launch relatively small funds easily. New participants in the market will increase and more similarity with the internationally recognized small fund structure.
Earlier, PPM was valid for only 6 months. Now it is valid for 12 months. This will reduce the hassle of resubmitting documents to FMEs. Additional time will be available to start operations. Administrative costs will be reduced, and fund launch plans can be completed more flexibly.
If two individuals meet the qualifications separately, they can invest in the same scheme as joint investors. In this case, parents, children, or couples can meet the minimum investment standard together. This increases the scope of entry into the scheme and creates the possibility of family-based investment.
FMEs with assets under management of more than USD 1 billion will have to appoint an additional senior manager within six months. This aims to strengthen risk management. In the case of retail FMEs, the rules are relatively flexible, and the scope of KMP qualifications has also been expanded in the new rules.
If a person has a charge sheet pending against him for an economic offense, he will be ineligible for a regulated position. Again, a person who was previously banned will be able to start working as soon as the ban period ends. This maintains both good governance and fair play.
Investments in bank deposits and overnight schemes are now possible in both retail and non-retail schemes. This will make it easier to maintain more liquidity in the fund. These low-risk options create a safe strategy for investors and will help fund managers maintain portfolio balance.
The new rules have made it easier to enter the investment market. By reducing joint investments, reducing corpus, and tightening transfer approvals, investor protection is increasing. At the same time, transparency, participation, and security have improved as investment facilities have increased.
The new policies, based on international standards, are establishing GIFT-IFSC as a developed foreign investment center. Simple rules, low barriers and a world-class framework will attract global fund managers. This will open up market expansion and foreign investment opportunities.
Enterslice provides professional support in fund registration, structuring, staffing, reporting, and regulatory approval processes. The firm provides advice and complete solutions to align operations with FM Regulations 2025, mitigate regulatory risks, and set up businesses in GIFT-IFSC.
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