IFSCA eases compliance for fund managers in GIFT City to boost investment

The International Financial Services Centres Authority (IFSCA) has unveiled regulatory relaxations for fund management entities (FMEs) in Gujarat’s GIFT City, aiming to attract global investors, simplify compliance, and foster growth in retail and non-retail investment schemes. 

 

The minimum corpus requirement for retail investment schemes has been slashed from $5 million to $3 million, while the threshold for Portfolio Management Services (PMS) is halved to $75,000 (from $150,000). 

 

Retail schemes can now invest up to 15 per cent in a single company with prior IFSCA approval. Sectoral, thematic, or index-linked schemes may exceed the 25 per cent sectoral cap if aligned with their benchmark index weightage. 

 

 

Close-ended retail schemes no longer require mandatory stock exchange listing if each investor commits at least $10,000. 

 

For venture capital and non-retail funds, IFSCA has introduced extended validity of Private Placement Memorandums (PPMs) to reduce renewal frequency; lower minimum corpus requirements and provisions for joint investment and relaxed limits on investments in associate entities. 

 

Fund managers may now open overseas branches or representative offices for marketing and client services without prior IFSCA approval, needing only a post-facto intimation.

 

Appointments of key managerial personnel no longer require regulatory clearance, streamlining hiring processes. 

 

These reforms aim to position GIFT-IFSC as a competitive hub for global fund managers.

 

As of December 2023, 139 FMEs operate in GIFT City, a number likely to rise with these changes.