The FAQs on the Registration of Fund Management Entities (FMEs) and Authorization of Schemes or Funds under IFSCA (Fund Management) Regulations, 2022 provide comprehensive guidance for entities seeking registration and authorization within the International Financial Services Centres Authority (IFSCA) framework. The document outlines the necessary procedures, documentation, and key considerations for FMEs and their associated schemes or funds.

Key Takeaways
Covering crucial aspects such as documentation requirements, details of key executives, financial statements submission, net worth certification, and insights into shareholding and capital structure, the FAQs ensure a thorough understanding of the regulatory expectations. Emphasizing transparency and compliance, the guidelines offer entities a robust framework for successfully operating within the IFSCA ecosystem.

(a) Registration Documents: The document specifies the essential registration documents required based on the type of entity, such as companies, LLPs, and trusts. Details on existing registrations with IFSCA or other financial regulators need to be submitted as part of the application.

(b) Key Executives Details: Requirements for providing details of Key Executives, including the Principal Officer and Compliance Officer, are outlined. Emphasis is placed on presenting comprehensive profile of Key Executives, encompassing educational qualifications and professional experience.

(c) Financial Statements Submission: Clear guidelines are provided for submitting the previous three years’ consolidated/standalone audited financial statements. For newly incorporated entities, options include submitting Income Tax Returns and the Income Tax Return Acknowledgements in lieu of financial statements.

(d) Net Worth Certificate: The requirement for a Net Worth Certificate is explained, with specific details on submission depending on the nature of the applicant (branch, subsidiary, standalone entity).

(e) Shareholding and Capital Structure: Detailed information on share ownership, capital structure, Ultimate Beneficial Owners, and Controlling Shareholders is mandated.

(f) Business Profile and Plan: The FME application requires a detailed business profile providing insights into the applicant’s history, industry presence, and market position. A detailed business plan outlining proposed activities within the IFSC is necessary.

(g) Authorisation of a scheme or fund: The FAQs also include guidelines on borrowing and levering for schemes and funds clarifying any conditions and limitation for such borrowing. Further, it mentions the essential sections, clauses, and points to be included in a Private Placement Memorandum of a scheme or a fund.

(h) Accounting standards: The FMEs must maintain books of accounts for a minimum of ten years, annual report of accounts for schemes must be submitted to IFSCA within four months from the end of the financial year.

Access FAQs here:
https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Ffinal-version-of-faqs16112023094317.pdf&Title=FAQs%20on%20Registration%20of%20a%20Fund%20Management%20Entity%20%28FME%29%20and%20Authorisation%20of%20a%20Scheme%20or%20Fund%20under%20IFSCA%20%28Fund%20Management%29%20Regulations%2C%202022&Date=16%2F11%2F2023

Credits: Rashi Dhir (Senior Partner & Head of Corporate)

Harshit Kumar (Associate) & Astha Jindal (Associate)