Independent custodian appointment governs retail, open-ended restricted, and larger schemes, with conditional jurisdictional and transitional alternatives available.

Regulation 132 requires an FME to appoint an independent custodian for retail schemes, open-ended restricted schemes, and other schemes with assets under management above USD 70 million, subject to an exemption for fund of funds schemes whose underlying schemes have independent custodians. Custodians must ordinarily be based in IFSC, although a locally regulated custodian may be appointed where the securities jurisdiction requires it. A 24-month transition period permits appointment of a regulated custodian in India or another foreign jurisdiction for schemes required to appoint an IFSC-based custodian.

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