CAM GIFT City IFSC Updates

Clarifications in relation to Investment Restrictions on Retail Schemes set up in IFSCs

The International Financial Services Centres Authority (“IFSCA”) vide circular dated October 29, 2024 clarifying exemptions for retail schemes in International Financial Services Centres (“IFSC”) in the nature of a fund of fund structure. IFSCA has clarified that in case of investment by retail schemes investing in unlisted securities issued by an open-ended investment funds and is regulated by the concerned regulatory authority in its home jurisdiction, the following limits / ceilings will not apply:

1. 15% cap on investment of the total Assets-under-Management (“AUM”) of scheme in unlisted securities for open-ended schemes.
2. Minimum investment of USD 10,000 for close-ended schemes investing more than 15% of AUM in unlisted securities.
3. 50% cap on investment of AUM in unlisted securities in case of close-ended scheme.
4. 25% limit on investments of AUM in the associates.

The circular further mandates that where the retail scheme is in the nature of fund-of-funds scheme, the Fund Management Entities (“FME”) shall disclose in the offer document the details of the underlying schemes wherein the investments are intended to be made and the underlying association of FME, if any.

The circular is available here

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