IFSCA eases norms for fund managers in GIFT City; approves new GIC rules

IFSCA has cleared relaxations for fund management entities in GIFT City, including KMP eligibility and PPM extensions, and approved new Global In-House Centres Regulations, 2025

The International Financial Services Centres Authority (IFSCA) cleared a series of regulatory relaxations aimed at easing operations for fund managers in GIFT City, along with a revamped framework for global in-house centres (Gics) and capital market intermediaries.

 

What changes has IFSCA approved for fund management entities? 

In its meeting held on December 22, the IFSCA approved amendments to the Fund Management Regulations to address operational challenges faced by fund management entities (Fmes) and to improve ease of doing business.

 

A key change is the relaxation of eligibility norms for key managerial personnel (Kmps). In addition to existing experience-based requirements, a certification-led alternative route with reduced experience thresholds will now be permitted. The scope of eligible work experience has also been widened to include consulting and advisory firms, as well as private and public companies undertaking finance-related work.

 

 

What flexibility has been introduced for fundraising timelines and PPM validity? 

The regulator also introduced greater flexibility in fundraising timelines. Fmes managing venture capital and restricted schemes will now be allowed multiple six-month extensions for the validity of their private placement memorandums (Ppms), replacing the earlier one-time extension limit.

 

A one-time three-month window will also be offered to schemes whose Ppms have already expired, including open-ended schemes that began investing with $1 million but failed to reach the minimum $3 million corpus. IFSCA said additional safeguards would be put in place to protect investor interests in such cases.

 

What is the custodian migration window for FMEs? 

Further, Fmes that are required to appoint an IFSC-based custodian will get a 24-month migration window, subject to conditions.

 

What are the new rules for global in-house centres in GIFT City? 

Beyond fund management, the authority approved a new set of IFSCA (Global In-House Centres) Regulations, 2025, replacing the 2020 framework. The revised rules recognise multiple operating models for Gics, permit limited servicing of Indian group entities, ease employee transfer caps, and allow third-party service providers and co-delivery models.

 

The move is aimed at positioning GIFT City as a global hub for high-value financial and technology services, at a time when India’s Gic ecosystem is expanding rapidly.

 

What other ease-of-business measures did IFSCA approve? 

In another measure, IFSCA removed the minimum office space requirement for book-keeping, accounting, taxation and financial crime compliance service providers, citing high fixed costs as a barrier to entry.

 

The authority also approved amendments to capital market intermediary norms, including lower experience requirements for compliance officers, fintech and various degrees as eligible qualifications.

 

Capital market intermediaries holding multiple registrations will be allowed to appoint a single principal officer across verticals, except for distribution activities, which will require a separate vertical head.