The International Financial Services Centres Authority on 19th April 2022 has published the International Financial Services Centres Authority (Fund Management) Regulations, 2022 which shall come into force with effect from 19th May 2022.
As per the regulation, an entity intending to undertake the business of fund management, shall obtain a certificate of registration from the Authority as a FME (Fund Management Entity) and shall manage different types of funds and schemes subject to meeting the eligibility criteria.
The certificate of registration of a FME shall be valid for such period as may be specified by the Authority, unless it is suspended or cancelled by the Authority or surrendered by the FME and taken on record by the Authority.
A FME may launch Venture Capital schemes through a private placement by filing a placement memorandum with the Authority along with the application fees as specified by the Authority. Venture Capital Schemes are schemes that can be launched by the FMEs that invests primarily in unlisted securities of start-ups, emerging or early-stage venture capital undertakings mainly involved in new products, new services, technology or intellectual property right based activities or a new business model or other schemes which invest in such entities and shall also include an angel fund.
The validity of the placement memorandum for launch of the venture capital scheme shall be six (6) months from the date of filing with the Authority. Venture Capital schemes shall have less than fifty (50) investors. Accredited Investors or investors investing above USD 250,000 shall be permitted to invest in such schemes:
Provided that in case of investors who are employees or directors or designated partners/ partners of the FME, the minimum value of investment shall be USD 60,000:
Provided further that the minimum investment threshold shall not apply to an accredited investor and employees or directors or designated partners or partners of the FME.
Further under this regulation, FMEs shall a retail scheme for pooling money from all investors or a section of investors through an offer document for investment. The validity of the offer document for launch of the scheme shall be twelve (12) months from the date of observation letter of Authority. Retail schemes shall have at least twenty (20) investors with no single investor investing more than twenty five percent (25%) in a scheme:
Provided that the condition shall be complied within a maximum period of six (6) months from the closure of the offer.
