IFSCA ALLOWS EXTENSION OF EXPIRED PLACEMENT MEMORANDUM FOR IFSC FUND SCHEMES

Overview

• The International Financial Services Centres Authority (IFSCA) has issued a Circular dated 11 September 2026 permitting Fund Management Entities (FMEs) to seek extension of an expired Placement Memorandum, even where the application for extension is filed after its validity has expired.
• Under the IFSCA (Fund Management) Regulations, 2025, the Placement Memorandum of a Venture Capital Scheme or Restricted Scheme is ordinarily valid for 12 months from the date on which IFSCA communicates that it has been taken on record.
• During this period, the FME is required to declare the first close by achieving the prescribed minimum corpus.
• Earlier, an application for extending the validity was required to be filed while the Placement Memorandum was still valid. The new Circular provides a mechanism for extension even after expiry.
• IFSCA may now consider an extension application after the Placement Memorandum has expired, subject to the prescribed fees, restrictions and regulatory requirements.

CONDITIONS FOR EXTENSION OF AN EXPIRED PLACEMENT MEMORANDUM

• Extension fee: An Extension fee equal to fifty per cent (50%) of the fee applicable for filing a fresh scheme of that nature under the FM Regulations, for each six-month extension block required;
• Late fee: A Late fee equal to fifty per cent (50%) of the applicable extension fee;
• No material changes: The FME shall not make material changes to the placement memorandum in respect of the name, investment objective, investment strategy, structure (open-ended / close-ended), category or nature of the scheme. Any such material change requires filing of a fresh placement memorandum under the FM Regulations;
• Additional information: The FME shall furnish such additional information, documents or declarations as IFSCA may require for granting the extension;
• Late fee borne by FME: The late fee shall be borne entirely by the FME and shall not be charged, recovered, reimbursed or otherwise passed on, directly or indirectly, to or from the scheme or its investors.

VALIDITY OF THE EXTENSION

• An extension will ordinarily be granted for six months, calculated from the day immediately following the expiry of the Placement Memorandum.
• Where the extension application is filed after more than six months have passed, IFSCA may grant an extension covering additional six-month blocks, subject to payment of the applicable extension fee and late fee for the relevant periods.
• The extension does not waive any non-compliance during the expiry period, and IFSCA may still take action against the FME and/or its Key Managerial Personnel for activities undertaken while the Placement Memorandum remained expired.

CONCLUSION

• The Circular provides an important regulatory mechanism for FMEs whose Venture Capital or Restricted Scheme placement memorandum have already expired, avoiding the automatic need for a completely fresh filing in eligible cases.
• At the same time, the framework maintains regulatory discipline through additional fees, restrictions on material changes and continued accountability for activities undertaken during the expiry period.
• Any capital commitments accepted, units issued, investors onboarded or investments made while the placement memorandum stood expired remain open to regulatory action.