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CS Professional · IFSCA - Regulations, Listing and Compliances · Fund Management Services

Aaravi Fund Managers IFSC LLP holds registration as a Registered Fund Management Entity (Non-Retail) under the IFSCA (Fund Management) Regulations, 2022. It now wants to launch a retail scheme open to ordinary investors. What is the correct position?

Aaravi cannot launch a retail scheme on its Non-Retail registration. Retail schemes can be managed only by an Authorised Fund Management Entity, so Aaravi must first obtain that authorisation. Appointing more staff or keeping the scheme small does not widen the activities permitted to its registration category.

  1. AIt may launch the retail scheme because registration covers every type of scheme
  2. BIt may launch the retail scheme if it appoints an additional compliance officer
  3. CIt cannot manage a retail scheme on this registration and must first obtain authorisation as an Authorised Fund Management EntityCorrect
  4. DIt may launch the retail scheme if the scheme size is kept small

Explanation

A non-retail registered FME is limited to restricted schemes meant for accredited or sophisticated investors. Managing retail schemes requires the higher category of Authorised FME, which carries stricter eligibility. An extra compliance officer or a small scheme size does not change the permitted category.

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