Guidelines on Ascertaining KMP Eligibility in Accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025

GUIDELINES ON ASCERTAINING KMP ELIGIBILITY IN ACCORDANCE WITH REGULATION 7 OF THE IFSCA (FUND MANAGEMENT) REGULATIONS, 2025 (“FM REGULATIONS”). Following the introduction of the new Fund Management Regulations, there has been a number of industry queries regarding the eligibility criteria for Principal Officers (POs) and Compliance Officers (COs) for Fund Management Entities (FMEs). Accordingly, based on the CVs received and the nature of the enquiries made by FMEs, it has been decided to issue a brief set of ‘Guidelines for Ascertaining KMP Eligibility’ under Regulation 7 of the IFSCA (Fund Management) Regulations, 2025. These guidelines are being placed in the public domain for the benefit and guidance of FMEs. The guidelines are intended to provide clarity on the eligibility of Key Managerial Personnel (KMPs) and to assist FMEs in making informed hiring decisions. This initiative also aims to enhance transparency and support FMEs through a consistent framework. Regulation 7(5) of the FM Regulations reads as follows: (5) The applicant shall ensure that the aforementioned principal officer as specified under sub-regulation (1) and other KMPs as specified under sub-regulations (2), (3) and (4), shall be based out of IFSC and meet the following educational qualification and experience requirements: (a) A professional qualification or post-graduate degree or post graduate diploma (minimum one year in duration) in finance, law, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science from a university or an institution recognised by the Central Government or any State Government or a recognised foreign university or institution or association or a CFA or a FRM from Global Association of Risk Professionals or any other relevant educational qualifications as may be specified by the Authority: Provided that if the principal officer, specified under sub-regulation (1), has a work experience of at least 15 (fifteen) years in the activities related to fund management, including portfolio management, investment advisory or similar activities, the minimum educational qualification required for such person shall be a graduate degree in any field: (b) In addition to the qualifications mentioned under clause (a), an experience of at least five (5) years in related activities in the securities market or financial products including in a portfolio manager, fund manager, investment advisor, broker dealer, investment banker, wealth manager, research analyst, credit rating agency, market infrastructure institution, financial sector regulator or consultancy experience in areas related to fund management, such as deal due diligence, transaction advisory or similar activities: Provided that the consultancy experience in areas related to fund management, such as deal due diligence, transaction advisory, etc. shall be considered for a maximum period of 2 years and experience in other areas as mentioned in sub-regulation (b) shall be required for at least 3 years: Provided further that for the KMP referred under sub-regulation (2), the experience mentioned in clause (b) shall be required for a minimum period of 3 (three) years, if such KMP possesses a professional qualification Page 1 of 4 Guidelines on ascertaining KMP eligibility in accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”).and has experience in compliance or risk management in a listed company or an entity regulated by a financial sector regulator. Explanation. – For the purposes of this regulation, the professional qualification shall include membership of Institute of Chartered Accountants of India, Institute of Company Secretaries of India, Institute of Cost Accountants of India or any institution equivalent thereto in a foreign jurisdiction, and for KMP referred under sub-regulation (2) it shall also include Bachelor of Laws (LLB) from a university or an institution recognised by the Central Government or any State Government or a recognised foreign university or institution or association. 1. Calculation of experience for the purpose of Regulation 7(5)(b) of the IFSCA FM Regulations: Calculation of experience: Any intermediary that falls in the following categories may be considered for the purpose of calculating experience – any activity related to the securities market or financial products, not necessarily relating to fund management: Activity Regulated / Financial Regulator / Regulation Regulated by IFSCA Unregulated (Yes/No) Portfolio Regulated SEBI Yes Manager SEBI (Portfolio Managers) IFSCA (Fund management Regulations, 2020 regulations), 2025 Fund Regulated SEBI Yes Manager  SEBI (Alternative Investment Funds) IFSCA (Fund management (e.g., AIFs, Regulations, 2012 regulations), 2025 Mutual o The fund manager of an AIF is Funds) considered as a regulated entity in terms of the SEBI (Alternative Investment Funds) Regulations, 2012.  SEBI (Mutual Funds) Regulations 1996 Investment Unregulated SEBI Yes Advisor / Regulated  SEBI (Investment Advisers) IFSCA (CMI) regulations, Regulations, 2013 2025 o Unregulated - Any person who provides investment advice exclusively to clients based out of India are exempt to take registration under SEBI (Investment Advisers) Regulations, 2013 Broker Regulated SEBI Yes Dealer SEBI (Stockbrokers) Regulations IFSCA (CMI) Regulations, 1992 2025 Investment Regulated Regulated by SEBI under SEBI Yes Banker Merchant Bankers Regulations, IFSCA (CMI) Regulations, 1992 2025 Page 2 of 4 Guidelines on ascertaining KMP eligibility in accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”).Wealth Regulated Regulated by SEBI if wealth Yes Manager management activities include activities which also fall under the scope of Investment Advisor or Portfolio Management), otherwise unregulated Research Regulated SEBI Yes Analyst  SEBI (Research Analysts) IFSCA (CMI) Regulations, Regulations, 2014 2025 Credit Rating Regulated SEBI Yes Agency  SEBI (Credit Rating Agencies) IFSCA (CMI) Regulations, Regulations 1999 2025 Market Regulated SEBI Yes Infrastructure  Stock Exchange, Clearing IFSCA (Market Infrastructure Institution Corporations, Depositories, Institutions) Regulations, (MII) KRAs regulated under 2021, as amended up to respective regulations. November 01, 2024. IFSCA KRA Regulations, 2025 REITs/InVITs Regulated SEBI Yes SEBI (REIT Regulations, 2016 SEBI (InVIT) Regulations, 2016 Debenture Regulates SEBI Yes Trustees SEBI (Debenture Trustee) IFSCA (CMI) Regulations, Regulations, 1994 2025 Any entity Regulated  Listed entities regulated by SEBI Appropriate laws enacted by regulated by and other intermediaries not respective regulators a financial mentioned in specificity above, like sector ESG Rating Agencies regulator  Any entity including a bank –  co-operative banks,  regional rural banks,  small finance banks,  Payment Banks regulated by RBI  NBFCs or PSPs regulated by RBI  Any entity regulated by IRDA  Any entity regulated by PFRDA Consultancy Unregulated Need not be regulated (unless the No – Deal Due / Regulated activities are being undertaken as a Diligence / part of a registered intermediary) Advisory - To be considered for a period of two years Regulatory - Experience with SEBI, RBI, IRDA, PFRDA or foreign regulator or where Page 3 of 4 Guidelines on ascertaining KMP eligibility in accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”).the stock Exchange is a regulator, then the stock exchange Note: If the KMP has experience in any of the intermediaries / entities mentioned in the table above in any foreign country, the same shall also be considered for calculating experience. 2. Other points to note: a. Employment with any intermediary / regulator mentioned in the table above will be considered (whether employed as an employee or in a contractual capacity). Note: Individuals working in IT/Accounts/Training and Development/Audit etc. (non-core areas) in the intermediary / regulator may not be considered as relevant working experience. b. Individuals outsourced by Funds / Fund Managers from consultancy firms, in roles related to fund management may be considered, provided documentation supports the depth and relevance of their engagement. c. Individuals engaged in managing corporate treasury funds, or Family Offices not registered with any Financial Sector Regulator or similar activities may be considered. d. Individuals engaged in trading/ managing their own funds and not registered with any financial sector regulator will not be considered. e. Experience of individuals working with BPOs/KPOs or outsourcing firms would be considered as consulting firm experience which would cumulatively be subject to a maximum of 2 years as provided under the FM Regulations. f. For CO eligibility under 7(5)(b) that considers experience in compliance or risk management in a listed company or an entity regulated by a financial sector, only the experience related to securities market / financial regulatory compliance will be considered. E.g.: Individuals with experience limited to internal compliance or non-financial regulatory compliance [Example- Food & Drug Administration (FDA)] may not be considered. 3. It is advisable to appoint the proposed KMPs only after receiving confirmation from the Authority regarding the candidate’s eligibility. 4. In the event the Authority communicates that a KMP does not satisfy the eligibility requirements, any subsequent application for the said position shall be submitted along with the prescribed KMP application fee. Page 4 of 4 Guidelines on ascertaining KMP eligibility in accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”).