IFSCA Seeks comments on Proposed Amendments to Fund Management Regulations 2025

The International Financial Services Centres Authority (IFSCA) has published a Consultation Paper on proposed amendments to the IFSCA (Fund Management) Regulations, 2025, to further refine the regulatory ecosystem at GIFT-IFSC. The fund management industry at GIFT-IFSC has expanded significantly, now encompassing 177 Fund Management Entities (FMEs) and 272 schemes with cumulative commitments of USD $22.11$ billion. A substantial portion of the cumulative investment, over $\text{INR } 95,000$ Crore, has been directed towards India, aligning with the goal to ‘onshore the offshore’. Following the introduction of the 2025 regulations, which replaced the 2022 framework, the IFSCA seeks to introduce further amendments based on ongoing review and suggestions from industry leaders. These proposals, categorized as enhancing Ease of Doing Business (EoDB), introducing additional Safeguards for investor protection, and providing necessary Clarifications, are aimed at streamlining processes, reducing compliance burden, and fostering orderly growth. Specific changes include frameworks for Third-Party Fund Management Services and co-investment via Special Purpose Vehicles. The public and market participants are invited to submit their comments and suggestions on the proposed amendments by November 06, 2025.

International Financial Services Centres Authority

CONSULTATION PAPER on Amendments to IFSCA (Fund Management) Regulations, 2025

Published on: October 17, 2025

A. Background

1. The International Financial Services Centres Authority (IFSCA), as the unified regulator for International Financial Services Centres (IFSCs) in India, has been consistently striving to nurture a world-class financial ecosystem at India’s first IFSC, the Gujarat International Finance Tec-City (GIFT-IFSC). The confluence of a strong domestic economy, various policy measures taken by IFSCA, a conducive taxation regime accorded by the Government of India, policy initiatives undertaken by other domestic regulators, and the growing confidence of market participants and investors has contributed to the remarkable expansion of the fund management industry at GIFT-IFSC. Within a short span of three and a half years, the industry has exhibited a significant upward trajectory.

2. The fund management industry in GIFT-IFSC has been growing at a healthy pace and has attracted several domestic and foreign Fund Management Entities (FMEs) to set up their fund management business in IFSC. As on June 30, 2025, there are 177 FMEs registered with IFSCA, which have collectively launched 272 schemes. These schemes have garnered cumulative commitments of USD 22.11 billion and have made cumulative investments of USD 11.27 billion. In rupee terms, the cumulative investments have crossed INR 95,000 Crore. The largest share (~85%) of these investments has been channelled to India, a testimony of IFSCA’s commitment to ‘onshore the offshore’, while also creating a seamless conduit for the foreign investors, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs), looking to invest into and participate in the growing Indian economy.

3. Out of the 272 schemes, there are 16 Venture Capital Schemes (including Angel Schemes), 88 Category I & Category II Restricted Schemes, and 166 Category III Restricted Schemes. Further, 2 (two) Retail Schemes have also obtained authorisation, marking a major milestone in the broadening of the funds landscape in IFSC.

4. The IFSCA (Fund Management) Regulations, 2022, which were notified in April 2022, effectively laid the regulatory foundation of the fund management industry in IFSC. To further strengthen the regulatory ecosystem at IFSC, and as part of its continued commitment to streamlining regulatory processes, enhancing ease of doing business, and reducing compliance burden, IFSCA undertook a comprehensive review of the IFSCA (Fund Management) Regulations, 2022. Following a robust consultation process, the IFSCA (Fund Management) Regulations, 2025 (FM Regulations) were published in official gazette on February 19, 2025.

5. While the overarching principle of registering an FME with it being permitted to undertake a host of fund management activities and the overall regulatory framework remains the same, changes were undertaken to usher in further ease of doing business, clarify the intent of certain regulatory provisions and introduce safeguards as are deemed necessary for the protection of investors’ interest.

6. Further, in its endeavour to position GIFT-IFSC as the preferred jurisdiction for fund management activities, several other measures have been taken by IFSCA subsequently, as demonstrated below:

a. IFSCA has introduced a reform on Third-Party Fund Management Services, enabling FMEs in IFSC to launch and manage Restricted Schemes on behalf of third-party fund managers with certain additional safeguards.

b. A dedicated framework permitting co-investment through Special Purpose Vehicles has also been introduced to provide a regulated mechanism for co-investments related activities.

7. Further, analysis of and data related to the fund management activities in GIFT-IFSC is presented in

B. Annexure Agenda of the Consultation Paper

1. In pursuit of its mandate to develop a robust, transparent, and globally competitive fund management ecosystem, and as part of its continuous endeavour to streamline regulatory processes, IFSCA actively seeks suggestions from market participants during several round-table discussions and industry conclaves.

2. Further, as one of its outreach initiatives, IFSCA has organised Chintan Shivir 2025, where several leaders from the fund management and allied industry were invited to share their outlook and suggestions, which have provided IFSCA with additional suggestions for its consideration.

3. Moreover, taking into consideration the key suggestions received as above, the Consultation Paper encapsulates a series of proposals for amendments to the FM Regulations. These proposals have been broadly categorised under the following 3 categories (or a combination of these):

i. Proposals aimed at enhancing Ease of Doing Business (EoDB): In IFSCA’s interactions with the industry participants, some of the areas have been identified where the FMEs in IFSC are likely to experience operational hassles. Such proposals have been categorized as ‘EoDB’. These proposals are aimed towards bringing in efficiency by streamlining processes/timelines, reducing operational issues and the compliance burden.

ii. Proposals aimed at introducing additional Safeguards: Given the notable pace of growth of fund management activities in IFSC, it is imperative that a healthy culture of compliance is nurtured amongst the FMEs by, inter alia, ensuring adequate regulatory safeguards. These proposals are expected to lead to better protection of the investors in IFSC funds and orderly growth of business activities in IFSC. Such proposals have been categorized as ‘Safeguard’.

iii. Proposals aimed to provide Clarifications: The proposals are aimed to address drafting related issues, enhance readability of the FM Regulations or provide clarity of the regulatory intent. Such proposals have been categorized as ‘Clarification’.

4. The list of the provisions of the FM Regulations which are proposed to be amended and the rationale for the same, along with the proposed text of amendment, is placed at Annexure 2. Each of these proposals are specifically tagged under one or more of these categories – “EoDB”, “Safeguard” and “Clarification”, to adequately represent the intent behind the proposal.

5. In addition to the above, IFSCA, in order to facilitate innovation and support investments in sectors which are socially desirable, is planning to separately issue a Consultation Paper with the proposal to institute a regulatory framework for differential distribution in Restricted Schemes and Venture Capital Schemes with a view to facilitate blended finance and other fund structures. The Comments on the same may be provided to IFSCA in the manner as provided in the said Consultation Paper.

C. Public Comments

1. Comments and suggestions from the public are invited on the amendments proposed to the FM Regulations, as listed in Annexure 2.

2. Comments may be sent by email to Bharat Singh, Assistant Manager, IFSCA at bharat.singh@ifsca.gov.in and Mr. Abhineet Panwar, Assistant Manager, IFSCA at abhineet.panwar@ifsca.gov.in with a copy to Mr. Aditya Sarda, Deputy General Manager, IFSCA at aditya.sarda@ifsca.gov.in, latest by November 06, 2025.

3. The comments may be provided in the following format (MS Word or MS Excel only):