Skip to content

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

Meridian Fund Managers IFSC Pvt Ltd is an Authorised Fund Management Entity. Its promoters agree to sell a majority of their shareholding to a foreign investment group, which will take over control of the company. The share purchase agreement is to be completed next week. Which course of action is correct under the IFSCA framework for fund management entities?

Meridian must obtain IFSCA's prior approval before the change in control takes effect. A shift in control is a material change that lets the regulator assess the incoming controllers beforehand. Later reporting, home-country regulation of the buyer, or the absence of new schemes does not replace the approval.

  1. AComplete the transfer and report it to IFSCA in the next annual compliance report
  2. BObtain IFSCA's prior approval before the change in control takes effectCorrect
  3. CComplete the transfer if the foreign group is regulated in its home country, with no intimation needed
  4. DSeek IFSCA's approval only if the foreign group also wants to launch new schemes

Explanation

A change in control of a registered or authorised FME is a material event that needs the regulator's prior approval, so that IFSCA can test the incoming controllers for fitness and propriety. Reporting after completion defeats that purpose. The home-country regulation and new-scheme options are also wrong, because the trigger is the change in control itself.

Did you get it right without looking?

One question tells you little. A timed set on Fund Management Services shows your real accuracy, how long you take and where you lose marks.

Practise Fund Management ServicesFree diagnostic mock

More Fund Management Services questions