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

Zenith Capital Advisors Pvt Ltd has applied to IFSCA to operate as a fund management entity in GIFT IFSC. Its application is pending, but it has already found three wealthy investors and proposes to start managing their pooled money in a restricted scheme now to avoid losing them. Under the IFSCA (Fund Management) Regulations, 2022, what is the correct position?

Zenith cannot start managing the scheme. A fund management entity in GIFT IFSC must hold IFSCA authorisation or registration before it carries on the activity. A pending application gives no right to operate, and limiting the offer to accredited investors does not remove that requirement.

  1. AIt may start managing the scheme because the application has been filed and IFSCA acts on it quickly
  2. BIt may start the scheme if it informs IFSCA in writing within thirty days after launch
  3. CIt may start managing the scheme as long as only accredited investors are invited to subscribe
  4. DIt cannot carry on fund management activity until IFSCA grants the authorisation or registrationCorrect

Explanation

Fund management in an IFSC can be carried on only by an entity holding authorisation or registration from IFSCA. Filing an application confers no right to start. The accredited-investor option is wrong because investor type affects the kind of scheme, not whether the manager needs approval.

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