Restricted schemes may co-invest in permissible investments through a special purpose vehicle under the Authority's framework or through segregated portfolios issuing separate unit classes. Segregated-portfolio investments cannot be made on terms more favourable than those offered to the common portfolio, and their creation must be disclosed in the placement memorandum. A co-investment special purpose vehicle may undertake leverage if the placement memorandum discloses it.

Restricted schemes require the FME or its associate to maintain a prescribed minimum contribution, subject to a general 10% targeted-corpus ceiling. The contribution is not mandatory for relocated funds or schemes. The ceiling does not apply where specified non-resident ownership and investment-concentration conditions are met. Contribution proportionate to investor investment must be made within 45 days and maintained on an ongoing basis, subject to possible extension. Exemptions apply upon qualifying investor waiver, accredited-investor participation, or for fund of funds schemes investing in schemes with similar requirements.

Foreign-exchange market conditions kept the rupee under pressure against the US dollar amid global risk aversion and elevated crude oil prices. A correction in crude prices, recovery in domestic equities, and suspected Reserve Bank of India intervention helped the currency recover much of its intraday decline. Dollar strength, rising bond yields, geopolitical tensions, weak monsoon rainfall, and inflation concerns were identified as continuing factors affecting near-term currency sentiment.

Regulation 39 requires the Fund Management Entity to compute the net asset value of each restricted scheme at least monthly, with close-ended restricted schemes subject to at least half-yearly computation. It requires procedures and methodology for calculating net asset value to be fully documented, regularly verified, and amended if required.

Valuation of assets in restricted non-retail schemes requires the fund management entity and fiduciaries to comply with the investment valuation norms in the Sixth Schedule. Scheme assets must be valued by an independent service provider, such as a fund administrator, custodian, registered credit rating agency, registered valuer, or another person specified by the Authority. This requirement does not apply to qualifying fund of funds schemes whose regulated investee schemes are valued by an independent entity.

Borrowing and leveraging by a restricted scheme are permitted subject to disclosure, investor-consent and risk-management safeguards. The placement memorandum must specify maximum leverage and the methodology for calculating it. Any departure from disclosed leverage requires consent from two-thirds of investors by value. An FME using leverage must maintain a comprehensive risk-management framework appropriate to the fund's size, complexity and risk profile.

Restricted non-retail schemes must provide comprehensive placement memorandum disclosures on objectives, investors, corpus, strategy, methodology, tenure, fees, expenses, risk management and FME personnel. Material changes to fund strategy require consent from at least two-thirds of investors by value. FMEs must provide periodic net asset value and portfolio disclosures, immediately communicate other material information identified by the FME or fiduciaries, and comply with further applicable disclosure requirements.

Restricted schemes must limit an open-ended scheme's unlisted-security investments to 25% of corpus, subject to the stated fund of funds exception. They require a minimum corpus of USD 3 million, although an open-ended scheme may commence investments after raising USD 1 million and must meet the minimum within 12 months. Investments in associates and specified related-party securities transactions require approval from investors holding 75% by value, with voting exclusions for certain major transacting investors. Fund of funds schemes may be exempt where prescribed disclosures are made.

Restricted non-retail schemes may invest in unlisted or listed securities, money-market and debt instruments, securitised debt, units of other investment schemes, derivatives, limited liability partnerships, and Authority-specified financial products. Required placement memorandum disclosures apply to investments in other schemes and derivatives. Pending deployment, the fund management entity may use specified liquid investments. Investments must comply with the regulations, the scheme's investment objective and placement memorandum disclosures. Close-ended schemes may invest up to twenty per cent of corpus in specified physical assets.

Restricted schemes may be open-ended or close-ended. A close-ended scheme must disclose its proposed fundraising amount and a tenure of at least one year in the placement memorandum. Its tenure may be extended by up to two years with approval of two-thirds of investors by investment value. Any further extension requires express consent from willing investors and an exit opportunity for dissenting investors. Restricted schemes must be constituted in an IFSC as a company, limited liability partnership, or trust.

Restricted schemes are limited to 1,000 investors unless a different limit is specified. Investors meeting the prescribed minimum investment and Accredited Investors may invest. Employees, directors and designated partners of the Fund Management Entity are subject to a reduced minimum investment. Joint investors must ordinarily each meet the applicable minimum, while specified family-member pairs may satisfy the general threshold through their aggregate investment. Accredited Investors are exempt from the minimum investment threshold.

Restricted schemes may be launched by a Registered FME through private placement after filing a placement memorandum and applicable fees. Under the green-channel process, subscriptions may open once the placement memorandum is taken on record, subject to incorporation of Authority comments. The memorandum is valid for 12 months, within which the FME must achieve the prescribed minimum corpus and declare first close. A one-time six-month extension is available on payment of half the fresh-filing fee. Material changes must be immediately reported.

Section 54 requires acquisition of a new residential house within the prescribed period but does not require the sale proceeds from the original house to fund that acquisition. The source of funds is immaterial where the statutory purchase condition is satisfied, including where sale proceeds are used as business capital and the replacement house is purchased through borrowed funds. Exemption for the resulting capital gains remains available, and an addition based solely on alleged non-utilisation of sale proceeds is not sustainable.

Restricted Schemes may be launched by Registered FMEs and classified as Category I, Category II or Category III Alternative Investment Funds according to their investment strategy. Socially or economically desirable sectoral investments are Category I, while complex trading strategies, including listed or unlisted derivatives, are Category III. Other investments are Category II. Category I and Category II schemes must be close-ended, while Category III schemes may be close-ended or open-ended.

Investment valuation norms require an FME to value investments at realizable value in good faith under policies that ensure true and fair valuation. Policies must prescribe methodologies for each asset type, be applied consistently, address unreliable market quotations, undergo periodic review, and address conflicts of interest. For Retail Schemes, valuation policies and methods must be disclosed in the offer document and on the FME website. The FME remains responsible for fair valuation and correct NAV and must deviate from established procedures where necessary, with appropriate investor disclosures.

Advertisement standards for fund management products require communications to be accurate, fair, clear, complete and concise. Advertisements must not be false, misleading, biased or deceptive, or include assumptions, projections, testimonials or rankings. They must not obscure significant statements, exploit investor inexperience, use exaggerated slogans, or adopt language inconsistent with the product's nature, risks and return profile. Information must be timely and consistent with disclosures in the Scheme Documents.

GST refund applications must be examined, processed and disposed of within prescribed statutory timelines and departmental guidelines. Zonal Incharges and Ward Officers must personally monitor pending refund claims in their jurisdictions and ensure adherence to the prescribed procedure. Deviations from the procedure or undue delay in processing refund claims may attract appropriate action.

Schedule IV assigns Investment Trust responsibilities to trustees, investment managers, project managers, sponsors, valuers and auditors. Trustees hold assets for unit holders, supervise key managers, protect subscription monies, oversee unitholder voting and manage replacement of investment and project managers. Investment managers make investment decisions, ensure title, insurance, disclosures, reporting, annual audit and segregation of activities. Project managers operate and complete projects. Sponsors establish the trust, transfer relevant assets or interests and meet holding safeguards. Valuers must act independently and avoid conflicts, while auditors must provide a true and fair audit with access to records and information.

Fund management entities must exercise due diligence, protect investor interests, maintain segregated and ring-fenced scheme assets, provide accurate and timely investor information, apply prescribed valuation norms, and comply with AML/CFT requirements. Fiduciaries must oversee scheme operations, ensure arm's-length dealings, review associate transactions, and verify operational, audit and compliance arrangements before scheme launch. Principal officers, fund managers and compliance officers must address non-compliance, grievances and conflicts of interest. Portfolio managers must promptly deploy client funds, avoid trades against client interests, provide adequate risk information, and deliver suitable advice.

Net worth requirements under Schedule II of the International Financial Services Centres Authority (Fund Management) Regulations, 2025 prescribe minimum thresholds for fund management entities by category. An Authorised FME must maintain USD 75,000; a Registered FME operating on a non-retail basis must maintain USD 500,000; and a Registered FME operating on a retail basis must maintain USD 1,000,000.