The International Financial Services Centres Authority issued a circular dated April 10, 2026, clarifying governance requirements for schemes in International Financial Services Centres (IFSCs) by mandating strict segregation of fiduciary roles. Referring to the Fund Management Regulations, 2025, the Authority emphasized that fiduciaries—such as trustees, directors, or designated partners—must maintain independence, exercise due diligence, and uphold high standards of professional conduct. To prevent conflicts of interest, the circular prohibits Fund Management Entities (FMEs) from appointing fiduciaries to also provide services like fund administration, valuation, audit, or lending to the same scheme, whether directly or through associates. Existing schemes must align with these requirements by September 30, 2026. The circular, effective immediately, strengthens governance frameworks, enhances transparency, and ensures unbiased decision-making in fund management structures within IFSCs, thereby protecting investor interests and reinforcing regulatory oversight.
International Financial Services Centres Authority
Circular No. IFSCA-IF-10PR/7/2024-Capital Markets/10042026 | Dated: April 10, 2026
To,
All Fund Management Entities in International Financial Services Centres (IFSCs)
Dear Sir / Madam,
Subject: Governance and oversight of Schemes in IFSC – Segregation of the role of Fiduciaries
1. Reference may be drawn to sub-regulation (2) of regulation 17 of the International Financial Services Centres Authority (Fund Management) Regulations, 2025 (“FM Regulations”) which mandates that Fund Management Entities (FMEs) shall appoint fiduciaries which includes trustees in case of a scheme set up in the form of a trust, board of directors for the scheme set up in the form of a company, and designated partners for the scheme set up in the form of a Limited Liability Partnership (LLP).
2. Further, reference may also be drawn to regulation 17(5) of the FM Regulations, which mandates that the fiduciaries shall abide by the Code of Conduct and obligations, specified in the Third Schedule, which inter-alia provides that fiduciaries shall at all times render high standards of service, exercise due diligence, ensure proper care, and exercise independent professional judgment.
3. In this context, it is hereby clarified that a FME shall not appoint an entity acting as a fiduciary to a scheme, to provide fund administration, valuation, audit, and lending or financing services to that scheme, either directly or through its associate.
4. Accordingly, for the schemes which have already been taken on record by the Authority or filed with the Authority as on the date of issuance of this Circular, the FMEs shall take necessary steps to comply with the provisions of this Circular by September 30, 2026.
5. This Circular is issued in exercise of the powers conferred 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, and shall come into force with immediate effect.
A copy of this Circular is available on the website of the International Financial Services Centres Authority at www.ifsca.gov.in.
Yours faithfully,
Sd/-
Pavan Shah
General Manager
Division of Funds Regulation
Capital Markets Department
Email: pavan.shah@ifsca.gov.in
Tel: +91-79-61809844
