Mutual funds, AIFs required to seek authorisation for each scheme: IFSCA

As of March 31, there were a total 50 schemes being offered by fund management entities

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All fund management entities (FMEs), including mutual funds (MFs) and alternative investment funds (AIFs), will have to seek authorisation for each new scheme before the launch, the International Financial Services Centres Authority (IFSCA) announced on Friday through a circular.

"In order to provide operational clarity, it has been decided that all FMEs shall henceforth seek authorisation from the Authority for each scheme filed under Chapters III, IV, and V of the Regulations," said IFSCA in the circular.

At present, the Fund Management Regulations of IFSCA require FMEs to obtain registration for operations in the Gift City. Earlier this year, the IFSC regulator had issued a format for FMEs to submit the details of the scheme.

Currently, as per the FME Regulations, the fund management entity (FME) is required to obtain registration. There are three categories of FMEs registered in IFSC, differentiated based on retail and non-retail investors such as Exchange Traded Funds, AIFs, PMS, Angel Funds, and VC schemes, as well as light-touch registrations.

"This will lead to an additional step for FMEs seeking registration for each fund or scheme. However, IFSCA is likely to provide registration for the fund or scheme at the earliest since all the necessary information or documents shall be submitted at the time of authorisation," said Naitik Doshi, associate director, Nangia Andersen.

As of 31 March, there were 65 FMEs registered in IFSC, of which 57 cater to non-retail investors. There were a total of 50 schemes by the end of the previous financial year, accounting for commitments of around $13.2 billion.

Further, there are nine such FMEs that provide portfolio management services in the Gift City, managing assets worth $413.4 million.