Amendments to the International Financial Services Centres Authority (Fund Management) Regulations, 2025

PRESS RELEASE Amendments to the International Financial Services Centres Authority (Fund Management) Regulations, 2025 In pursuance of its mandate to develop a robust, transparent and globally competitive fund management ecosystem, IFSCA has been continuously undertaking measures to strengthen the regulatory framework and facilitate the ease of doing business in GIFT IFSC.

In furtherance of these endeavours, the International Financial Services Centres Authority (Fund Management) (Second Amendment) Regulations, 2026 have been notified and published in the Official Gazette on September 10, 2026, which bring into effect the amendments to the IFSCA (Fund Management) Regulations, 2025 approved by the Authority in its meeting held on July 24, 2026. Based on the feedback received through Chintan Shivir and other interactions with the industry participants, supervisory experience of the Authority, public consultation and recommendations of the Fund Management Advisory Committee, these amendments are aimed at promoting ease of doing fund management business in GIFT IFSC, strengthening investor protection through enhanced disclosures, and providing greater regulatory clarity on certain aspects.

The following key amendments have been notified:

A. Independent Valuation

1. To reduce the operational burden on Fund Management Entities (FMEs), the periodicity for computation and disclosure of Net Asset Value (NAV) by close- ended Restricted Schemes may be enhanced by the FME from semi-annual to annual, subject to prior approval of at least 75% of the investors in the scheme by value of their investments.

1 of 42. Further, the requirement of obtaining an independent valuation of the portfolio of Venture Capital Schemes (VC Schemes), Restricted Schemes and Retail Schemes is relaxed for the investments made in underlying scheme(s) which are valued by an independent entity.

B. Contribution by FME / Associates

1. To facilitate FMEs in building a track record of performance in the overseas markets, in place of the existing limit of 10%, FMEs and their associates having Indian ultimate beneficial owners are permitted to contribute up to 25% of the corpus of VC schemes and Restricted Schemes, where such scheme(s) invest only in IFSC or foreign jurisdictions.

2. The exemption from the requirement of minimum contribution by the FMEs and their associates is expanded to also include those Restricted schemes and Retail schemes which are either Index Schemes or Fund of Funds Schemes investing in Index Schemes or passive Exchange Traded Funds (ETFs), subject to appropriate disclosures.

3. With respect to the exemption from contribution requirement for FME/Associate in case of Fund of Funds schemes, it is clarified that the automatic exemption shall be available only if no active fund management is involved.

C. Venture Capital Schemes VC Schemes are permitted to participate in subsequent rounds of fund raising by their investee companies even after such companies have completed ten years from incorporation, subject to specified conditions.

D. Retail Schemes The extant sectoral concentration limits applicable to Retail Schemes are exempted for the Funds of Funds Schemes investing in underlying schemes that 2 of 4are regulated by the concerned financial sector regulator and permitted for offering to retail investors in their home jurisdictions.

E. Appointment of Auditor To promote ease of doing business for the FMEs and schemes established by Governments and Government-related investors, such as Sovereign Wealth Funds, where such investors are the sole contributors, directly or indirectly, a common auditor may be appointed for such FME and its schemes.

F. ESG Disclosures by FME For sustainability-related disclosure requirements applicable to FMEs having Asset Under Management (AUM) exceeding USD 3 billion as at the close of a financial year, the AUM of Fund of Funds Schemes is excluded while determining the prescribed threshold.

G. Timeline for Annual Report of Scheme The timeline for submission of the Annual Report of Schemes to the Authority and the investors is extended from four (4) months to six (6) months from the end of the financial year.

H. Investor Approval To facilitate operational efficiency, approvals of investors for certain matters may be obtained through disclosures in the PPM and the agreement executed with the investors.

I. Measures for Strengthening Investor Protection and Regulatory Governance

1. The indicative list of disclosure requirements in the offer document of Retail Schemes is expanded to also include disclosures pertaining to the methodology of NAV computation and conflicts of interest.

3 of 42. Various internal policies, frameworks, etc. which are required to be put in place by the FME under the Regulations are required to be approved by the governing body of the FME or by such committee or official(s) to whom such powers have been delegated by the governing body.

3. Temporary deployment of monies under a VC Scheme, Restricted Scheme and Retail Scheme. prior to such scheme achieving the minimum corpus / funds raised, is permitted in such instruments that support the preservation of capital and adequate liquidity, with prior disclosures in the placement memorandum or offer document.

4. The scope of the definition of "associate" is expanded to appropriately cover natural persons and juridical persons that are not in the form of a body corporate having a direct economic interest.

J. Other Measures

1. The timelines for commencement of NAV and portfolio disclosures have been clarified by linking them to the commencement of investment activities, excluding temporary deployment of monies in permitted instruments.

2. The extant timeline for appointment of key service providers (Fund Administrator, Auditor) is relaxed by requiring such appointments to be completed before the execution of the agreement with any investor in the scheme, while also including other service providers (Valuer, Custodian) under this requirement. The fiduciary shall ensure compliance with the prescribed timelines.

Gandhinagar September 16, 2026 4 of 4