International Financial Services Centres Authority (IFSCA), on dated August 31, 2026, has notified the IFSCA (Fund Management) (Second Amendment) Regulations, 2026, approved at its 29th authority meeting on July 24, 2026. The key amendments include:

i.     expanding the definition of ‘associate’ to cover any person having a 20% or more direct economic interest in the Fund Management Entities (‘FMEs’) or related entities, excluding scheme fiduciaries unless they hold direct economic interest or control in the FME;

ii.    removing certificates of deposit from permissible capital-preserving instruments while permitting deployment of pre-close monies in bank deposits, overnight funds, etc.;

iii.   linking net asset value (‘NAV’) and portfolio disclosure timelines to commencement of investment activities;

iv.    permitting close-ended restricted schemes to extend NAV computation from semi-annual to annual with 75% investor approval;

v.     relaxing the 10% FME/associate contribution ceiling to 25% for venture capital (‘VC’) and restricted schemes investing only in International Financial Services Centre or foreign jurisdictions;

vi.    excluding fund of funds assets under management from the USD 3 billion (approx. INR 284.83 billion) environmental, social and governance disclosure threshold;

vii.   extending the annual report submission deadline from four to six months;

viii.  enabling differential distribution in VC and restricted schemes through senior and junior units to facilitate blended finance structures;

ix.    requiring appointment of key service providers before execution of investor agreements; and

x.     permitting multiple six-month placement memorandum validity extensions, with a 25% fee for the first extension and a 50% fee for subsequent extensions.