An expert committee on International Financial Services Centres Authority (IFSCA) has proposed that AMCs wanting to do business in Indian Financial Services Centre (IFSC) should be allowed to seek approval from a single window.
In its proposal, the committee said, “A fund manager intending to undertake host of activities related to fund management viz. manage retail schemes (including exchange traded funds), non-retail schemes (alternative investment funds), undertake portfolio management services or operate as manager to various investment trusts (REIT and InvIT) can do so by seeking a single unified registration from IFSCA. A fund manager intending to manage funds or activities for non-retail investors only shall have lower eligibility requirements. Further, a special registration with light touch requirements shall be accorded to a fund manager intending to invest in unlisted securities of start-ups, emerging or early-stage companies mainly involved in new products, new services, and technology through a venture capital scheme in IFSC.”
The committee has also sought relaxation in terms of eligibility, minimum number of key management personnel and infrastructure requirement for AMCs.
Further, the committee has proposed that AMCs should be allowed to offer schemes like active ETFs like smart beta products and commodity ETFs like gold and silver ETFs in IFSC. Currently, AMCs are allowed to offer index based ETFs in IFSCs.
In addition, AMCs should be allowed to set up family offices in IFSCs, said the committee.
The committee of experts has been constituted in May 2021 to review global best practices and make recommendations to the IFSCA on the roadmap for the industry.
From the mutual fund industry, Leo Puri, former CEO of UTI MF, Nilesh Shah, MD and CEO, Kotak MF, Niraj Choksi, Co-founder, NJ India and Sundeep Sikka, ED and CEO, Nippon India MF have played a key role in drafting these recommendations.
AMCs can service global clients through IFSC. AMCs operating in IFSCs are exempted from certain domestic laws; instead, they follow international practices.
Recently, two fund houses – Aditya Birla Sun Life MF and Nippon India MF have received IFSC’s go ahead to set up business in GIFT city Gandhinagar, Gujarat.
