The International Financial Services Centres Authority (“IFSCA”), in exercise of the powers conferred by Section 12 and Section 13 of the International Financial Services Centres Authority Act, 2019, read with Regulation 146 of the IFSCA (Fund Management) Regulations, 2025, vide Circular No.: F. No. IFSCA-AIF/132/2024-Capital Markets, dated October 23, 2025 (“Circular”),[1] has issued a Framework on Stewardship Code applicable to Fund Management Entities (FMEs) and Institutional Investors operating within the International Financial Services Centre (“IFSC”).
This framework is introduced pursuant to the IFSCA (Fund Management) Regulations, 2025, notified on February 10, 2025.
Key Highlights of the Circular
- The Stewardship Code aims to align the practices of institutional investors in IFSC with global standards of responsible ownership and long-term value creation. It seeks to promote active and informed engagement by investors with investee companies to enhance governance, sustainability, and accountability.
The Stewardship Code shall apply to all Fund Management Entities (FMEs) and Institutional Investors, including Alternate Investment Funds (AIFs) and Retail Funds (RFs) operating in the IFSC. Entities are encouraged to adopt the Stewardship Code as detailed in Annexure-A of the Circular; or adopt a Stewardship Code issued by:
- A financial regulator in their home jurisdiction; or
- Indian financial regulators such as SEBI, IRDAI, or PFRDA; or
- A statutory professional body such as the Institute of Company Secretaries of India (ICSI).
However, any adopted code must substantially reflect the core principles outlined in IFSCA’s framework.
- The adopted Stewardship Code must be communicated to IFSCA and disclosed publicly on the entity’s website. For Fund of Funds Schemes, the FME may disclose the Stewardship Code of the underlying or target fund instead of creating a separate one.
- Entities must ensure regular, transparent reporting on adherence to the Stewardship Code via their website and periodic reports to IFSCA and mechanisms must be in place to periodically review the efficacy and compliance of the adopted code and related reporting framework.
Further, the detailed Framework on Stewardship Code can be accessed as Annexure-A of the Circular.
[1]https://ifsca.gov.in/CommonDirect/GetFileView?id=47a297ad49aaae8fa365313a911cc138&fileName=Circular_for_Framework_on_Stewardship_Code_in_IFSC_20251023_0701.pdf