On May 21, 2025, the International Financial Services Centres Authority (“IFSCA”) issued a Framework to facilitate Co-investment by Existing Schemes at GIFT IFSC (“Framework”).[1]
Since the notification of the Fund Management Regulations in April 2022, the fund management ecosystem at International Financial Services Centre has witnessed substantial growth. The ecosystem currently includes over 160 (One Hundred and Sixty) Fund Management Entities and more than 250 (Two Hundred and Fifty) registered schemes. With the recent enactment of the Fund Management Regulations, 2025, the IFSCA continues to promote a dynamic and facilitative environment for fund management activities.
In a significant move to enhance investment efficiency and ease of operations, the IFSCA has introduced this framework to facilitate co-investment by venture capital schemes and restricted schemes through the creation of Special Schemes, operationalised via Special Purpose Vehicles (SPVs), also known as Co-Investment Vehicles (CIVs).
Key Features of the Framework:
- Enabling Existing Schemes to Co-Invest: Existing venture capital and restricted schemes shall now be permitted to co-invest through Special Schemes, enabling faster deployment of capital and more efficient structuring of investments.
- Flexibility in Investment Timing: Special Schemes shall be allowed to make investments even before intimation to the IFSCA, significantly expediting the investment process.
- Post-Investment Compliance Window: The Framework provides that the term sheet for a Special Scheme may be submitted to the IFSCA within 45 (Forty Five) days from the date of the investment. This post-investment filing mechanism is aimed at enhancing procedural ease and regulatory flexibility.
- Defined Structure and Objectives: The framework lays down a clear definition of the structure, objective, and nature of Special Schemes, thereby bringing clarity to stakeholders and facilitating consistent implementation. The same can be found in the Framework on the official IFSCA website.
[1]https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Fframework-to-facilitate-co-investment-by-existing-schemes-at-gift-ifsc_press-release21052025104356.pdf&Title=Framework%20to%20facilitate%20Co-investment%20by%20Existing%20Schemes%20at%20GIFT%20IFSC&Date=21%2F05%2F2025