The total investor base across GIFT City’s fund management industry expanded 42.7% during Q4 FY26, rising from 6,721 investors at the end of December to 9,594 by March. Of the 2,873 new investors added during the quarter, more than three-fourths were accounted for by retail schemes.
Investor participation in retail schemes, also known as Global Mutual Funds, rose from 1,239 to 3,438 during the quarter, making them the fastest-growing segment within the IFSC fund ecosystem.
The growth came alongside an expansion in the number of operational Fund Management Entities (FMEs), which increased to 217 from 202, while registered schemes rose to 360 from 327.
Simultaneously, the primary listing market for debt securities showed strong resistance against global bond market corrections. Cumulative debt listed on IFSC exchanges expanded to $70.31 billion by late March, growing from $68.03 billion at the end of December.
Key regulatory changes introduced during the quarter also aimed to simplify market participation and strengthen the IFSC ecosystem.
Consolidated Master Framework: Introduced in February 2026, the framework enables market intermediaries to apply through a single-window process for multiple capital market activities, including Broker-Dealer, Portfolio Manager, Investment Adviser and Custodian services. The move is intended to streamline approvals and reduce operational complexity.Placement Memorandum (PPM) Flexibility: IFSCA amended fund management regulations to allow multiple extensions to fundraising timelines under
certain circumstances, providing fund managers with greater flexibility in raising capital.
Depository Framework Changes: The regulator directed operating units to migrate their dematerialised securities to obtain International Securities Identification Numbers (ISINs) through IFSC-recognised depositories by August 31, 2026. The measure is aimed at strengthening the IFSC’s market infrastructure and settlement framework.
The quarter also saw increased participation from overseas Indians. Investments by Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) rose 18.6% sequentially to $747.3 million at the end of March, up from $630.1 million in the previous quarter.
In tandem with the volume spikes, the regulator executed a widespread enforcement sweep, firing off a heavy volume of Show Cause Notices (SCNs) and regulatory orders to root out non-compliance:
Fund Management Blunders: The regulator slapped four (4) FMEs with Show Cause Notices for severe structural lapses, including the failure to appoint dedicated Key Managerial Personnels (KMPs).
Capital Market Intermediaries under Fire: Seven (7) Capital Market Intermediaries were slapped with SCNs due to failure to submit mandatory quarterly reports, conducting completely unregistered business activities, and non-payment of statutory fees.
Adjudication & Fines: Beyond SCNs, final penalty orders were officially issued against two Capital Market Intermediaries for lacking infrastructure and manpower commensurate with their business size, while an insurance intermediary and
multiple finance companies were cornered for non-commencement of business operations and fee evasion.
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