Retail Schemes may be launched by Registered FMEs (Retail) to pool money from all investors or a section of investors through an offer document. The pooled funds must be invested in permissible investments in accordance with the scheme's stated investment objective.

Restricted schemes may co-invest in permissible investments through an SPV under the applicable framework or through segregated portfolios issuing separate classes of units. Investments by segregated portfolios cannot be on terms more favourable than those offered to the common portfolio. Creation of a segregated portfolio must be disclosed in the placement memorandum. An SPV used for co-investment may undertake leverage if the leverage is disclosed in the placement memorandum.

FME or associate contribution is mandatory for restricted schemes, subject to minimum corpus-based thresholds and a general 10% ceiling. Relocated schemes from outside India are exempt. The ceiling may be disapplied for qualifying non-resident structures with limited investee-company exposure, or qualifying Indian-resident structures investing only in permissible IFSC or foreign-jurisdiction investments within a higher contribution limit. Contributions must be made proportionately within 45 days and maintained continuously. Exemptions also apply through investor waiver, accredited-investor status, and specified passive fund structures with required placement memorandum disclosures.

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 an FME to compute the net asset value (NAV) of every restricted scheme at least monthly from the month investment activities commence. For a close-ended restricted scheme, NAV must be computed at least half-yearly. Where the FME has obtained prior investor approval, a close-ended scheme may compute NAV at least yearly from the relevant financial year. NAV calculation procedures and methodologies must be comprehensively documented, regularly verified, and amended where necessary.

Regulation 38 requires the fund management entity and fiduciaries of restricted, non-retail schemes to comply with Sixth Schedule investment valuation norms. For net asset value computation and disclosure, scheme assets must be valued by an independent service provider. The requirement is inapplicable to investments in other financially regulated schemes, made directly or through a manager in an IFSC, India, or a foreign jurisdiction, where the 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 schemes must disclose investment objectives, target investors, corpus, strategy, tenure, fees, expenses, risk-management practices, key managerial personnel, and relevant scheme details in the placement memorandum. Material strategy changes require consent of two-thirds of investors by value. NAV and portfolio disclosures must be made at prescribed intervals after investment activities commence, with annual NAV disclosure for close-ended schemes permitted upon approval by seventy-five per cent of investors by value.

Restricted schemes must maintain a minimum corpus of USD 3 million, although an open-ended scheme may commence investments after raising USD 1 million and must achieve the minimum within 12 months. Open-ended schemes may invest no more than 25% of corpus in unlisted securities and may do so only after achieving the minimum corpus. Associate investments and specified related-party securities transactions require approval of 75% of investors by value, subject to disclosed fund of funds arrangements and voting exclusions.

Restricted schemes may invest in specified securities, money-market and debt instruments, securitised debt, other investment schemes, derivatives, limited liability partnerships, and other specified financial products or assets. Investments must comply with the scheme's investment objective and placement memorandum disclosures. Monies received before the first close of a close-ended scheme or before an open-ended scheme raises the prescribed minimum funds must be placed only in investments preserving capital and ensuring adequate liquidity. Close-ended schemes may also invest up to twenty per cent of their 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.

Registered FMEs may launch restricted schemes through private placement by filing a placement memorandum and paying the applicable fee. Green-channel filing permits investor subscriptions once the memorandum is taken on record. The memorandum is valid for twelve months, during which the FME must achieve the prescribed minimum corpus and declare first close. Where the corpus is not achieved, successive six-month extensions may be sought while validity continues, subject to prescribed fees. Material changes in memorandum information must be immediately disclosed.

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 launched by Registered FMEs are classified by investment strategy for filing as Category I, Category II or Category III Alternative Investment Funds. Category I covers specified developmental, social, infrastructure and similar investments; Category III covers diverse or complex trading strategies, including derivatives; and Category II covers investments outside those categories. 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 claims must be examined and disposed of within prescribed statutory timelines and applicable departmental guidelines. Procedures for refund processing, sanction and grievance redressal for pending claims remain applicable. Zonal Incharges and Ward Officers must personally monitor refund pendency and ensure compliance within their jurisdictions. Any procedural deviation or undue delay in processing refund claims may invite 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 ensure compliant, diligent and investor-focused scheme management, including prescribed valuation and publication, fair investor disclosures, ring-fenced scheme assets and accounts, ethical conduct, AML/CFT compliance, and appropriate internal approvals. Fiduciaries must oversee scheme operations, service providers, associate transactions, net worth, fund property and required investor approvals or disclosures. Principal officers, fund managers and compliance officers must maintain regulatory compliance, manage conflicts, address investor grievances and report non-compliance. Portfolio managers must protect client interests, provide accurate risk information and avoid conflicted or misleading practices.