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.

Registration applications for fund management activities in an IFSC must be filed through SWIT with declarations of complete and true information, conformity of proposed activities with the object clause, and fitness and propriety of relevant persons. Applicants must notify material changes, undertake core investment, portfolio management and grievance-handling activities from the IFSC, and base required key management personnel there. Branch applicants must ringfence branch operations. Registration entails ongoing compliance with applicable legal and operational requirements and furnishing further information when sought.

Co-investment by a Venture Capital scheme may occur through a special purpose vehicle or a segregated portfolio issuing a separate class of units. Segregated portfolio investments cannot be made on terms more favourable than those available to the common portfolio, and their creation must be appropriately disclosed in the placement memorandum. A special purpose vehicle may undertake leverage if the leverage is disclosed in the placement memorandum.

FME contribution requirements for Venture Capital Schemes prescribe minimum and maximum investments based on the targeted corpus, with no mandatory contribution for relocated schemes. The contribution must be made proportionately with investor investments within 45 days, subject to extension, and maintained continuously. The maximum contribution ceiling does not apply where specified foreign-residency, beneficial-ownership and investment-concentration conditions are met. Exemptions apply on investor waiver, accredited-investor participation, or where a fund of funds invests in schemes with similar requirements.

Net asset value for each Venture Capital Scheme must be computed by the Fund Management Entity at least annually. The calculation procedure and methodology must be fully documented and regularly verified, with amendments made where necessary.

Valuation of venture capital scheme assets must comply with the investment valuation norms in the Sixth Schedule, and the Fund Management Entity and fiduciaries must ensure compliance. Assets are to be valued by an independent service provider, including a fund administrator, custodian, registered credit rating agency, registered valuer, or another person specified by the Authority. The requirement does not apply to qualifying fund of funds investments in regulated schemes already valued by an independent entity.

Borrowing and leverage by Venture Capital Schemes are permitted only where the placement memorandum discloses the maximum leverage and calculation methodology. Leverage must comply with those disclosures, and any deviation requires consent of investors holding at least two-thirds in value. A Fund Management Entity proposing to employ leverage must maintain a comprehensive risk-management framework appropriate to the scheme's size, complexity and risk profile.

Disclosure obligations for Venture Capital schemes require the placement memorandum to cover investment objectives, targeted investors, corpus, strategy, methodology, tenure, fees, expenses, risk management, key managerial personnel, and relevant FME and scheme particulars. The FME must disclose Net Asset Value annually within the placement memorandum timeframe and portfolio information annually within one month after each financial year. Material information identified by the FME or fiduciaries must be communicated immediately, subject to further Authority-specified disclosure requirements.

Venture Capital Schemes must maintain a corpus within prescribed minimum and maximum limits and invest at least 80 per cent of their corpus in recently incorporated investee companies or qualifying schemes. Associate investments require prior approval of 75 per cent of investors by value. Securities transactions involving associates, related schemes, or a substantial investor require the same approval, with the interested substantial investor excluded from voting. Fund of funds schemes may rely on placement memorandum disclosure of underlying schemes and relevant managerial associations instead of obtaining approval.

Venture Capital schemes may invest in specified securities, debt and money market instruments, securitised debt, limited liability partnerships, and permitted scheme or fund units, with placement memorandum disclosure where required. Pending deployment of funds, the fund management entity may use certificates of deposit, bank deposits, money market instruments and specified investment-scheme units. Every investment must comply with regulatory requirements, the scheme's investment objective and placement memorandum disclosures.

Venture Capital schemes must operate solely as close-ended schemes, with the amount proposed to be raised and a minimum three-year tenure disclosed in the placement memorandum. A scheme may be constituted as a company, limited liability partnership, or trust. Tenure extensions require investor approval, and extensions beyond two years require express consent from willing investors and an exit opportunity for dissenting investors.

Venture Capital Schemes are limited to fifty investors and permit investment by persons meeting the prescribed minimum threshold or by Accredited Investors. Employees, directors and designated partners of the Fund Management Entity may invest subject to a reduced threshold, while Accredited Investors are exempt from minimum investment requirements. Joint investors must each meet the applicable minimum contribution, with specified family relationships permitted to satisfy the general threshold on an aggregate basis. Registered Fund Management Entities may use restricted schemes to target more investors or accept lower application sizes.

Section 98(2) of the GST framework bars admission of an advance-ruling application where identical questions are already pending or decided in proceedings concerning the applicant. A show-cause notice and investigation addressing service classification, applicable tax treatment and input tax credit constitute parallel statutory proceedings. The bar may apply even where those proceedings arise after the application was filed, because a merits determination cannot continue once the same issues are under adjudication. Disclosure of such material developments is integral to assessing the application's maintainability.

Placement memorandum filing permits a Fund Management Entity to launch Venture Capital schemes through private placement under the green channel. Investor subscriptions may begin once the Authority communicates that the placement memorandum has been taken on record, subject to incorporation of any comments. The memorandum remains valid for twelve 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 the specified fee, and material changes must be immediately reported.

Venture Capital Schemes under Part A must be filed as a venture capital fund within Category I Alternative Investment Fund. A scheme filed under this framework may be construed as a venture capital fund for purposes of the Income Tax Act, the Foreign Exchange Management Act, and related rules, regulations, circulars, notifications, guidelines, or other relevant statutes.

Regulation 17 requires a Fund Management Entity to appoint prescribed fiduciaries before filing a scheme document. Companies require a Board of Directors, limited liability partnerships require Designated Partners, and trusts require Trustees, including the board of a trustee company where applicable. All fiduciaries must meet fit and proper requirements. Appointment of fiduciaries for retail schemes requires prior approval, and fiduciaries must comply with the applicable Code of Conduct and obligations.

Surrender of registration permits a Fund Management Entity to apply to the Authority for voluntary surrender of its certificate of registration. The surrender becomes effective only when accepted by the Authority, and filing an application alone does not terminate registration.

Registration of a Fund Management Entity remains valid for the period specified by the Authority, unless earlier suspended, cancelled, or surrendered and taken on record by the Authority.

Registration applications for Fund Management Entities may be refused only after deficiencies are communicated and the applicant is allowed 30 days to rectify them. If the deficiencies are not rectified to the Authority's satisfaction within that period, the Authority may refuse registration and must communicate the refusal with reasons.

Registration of a Fund Management Entity is conditional on regulatory compliance by the entity and its relevant officers and personnel. The entity must promptly notify the Authority of material changes in previously provided information or particulars affecting its registration. A registered entity cannot change its registration category without prior approval from the Authority.