In a bid to provide regulatory clarity and streamline the hiring process for Fund Management Entities (FMEs), the International Financial Services Centres Authority (IFSCA) has issued detailed ‘Guidelines for Ascertaining KMP Eligibility’ under Regulation 7 of the IFSCA (Fund Management) Regulations, 2025.
These guidelines specifically focus on determining the eligibility of Key Managerial Personnel (KMPs)—particularly Principal Officers (POs) and Compliance Officers (COs)—based on a combination of educational qualifications, relevant experience, and regulatory alignment. The move follows increasing industry queries in the wake of the recently introduced Fund Management Regulations.
🔍 What Does Regulation 7(5) Say?
Regulation 7(5) mandates that all designated KMPs must:
Be based out of an International Financial Services Centre (IFSC).
Meet specific educational qualifications, including a postgraduate or professional degree in finance, law, economics, business, or similar fields from recognized institutions.
Possess a minimum of 5 years’ experience in securities markets or related financial services roles. However, only 2 years of relevant consulting experience (e.g., deal due diligence, transaction advisory) will count, with the remaining 3 years to be in regulated roles.
A relaxation is offered for POs with 15+ years of fund management experience—they may be considered eligible with only a basic graduation degree.
📘 Key Clarifications in the Guidelines
Who Qualifies for Experience Calculation?
Experience across a wide array of regulated roles will count, including work with:
Portfolio managers
Fund managers (AIFs, mutual funds)
Investment advisers
Broker-dealers
Investment bankers
Wealth managers
Research analysts
Credit rating agencies
Market Infrastructure Institutions (MIIs)
Financial sector regulators (SEBI, RBI, IRDAI, PFRDA)
REITs, InVITs, and debenture trustees
Importantly, experience gained in foreign jurisdictions under similar regulated entities will also be accepted.
Consulting and Outsourced Roles
Consultants working on fund-related matters or individuals outsourced to funds in relevant capacities can be considered, but only up to two years of such experience will be counted.
Corporate Treasury & Family Offices
Professionals managing corporate treasury functions or working in family offices (even if unregulated) may be considered, provided the work is fund-management related.
Who Will Not Qualify?
Those managing personal portfolios or proprietary funds with no regulatory oversight.
Professionals working in support functions (IT, audit, training, etc.) within regulated entities.
Experience in non-financial compliance roles, such as those related to environmental or food safety regulation, will not count towards CO eligibility.
✅ Compliance Officers: A Special Note
For Compliance Officers, the guidelines stress the need for financial regulatory experience. Merely working in a compliance role at a listed company is not sufficient unless it involves securities market compliance.
💡 Recommendations for FMEs
To avoid regulatory setbacks, FMEs are advised to seek confirmation from IFSCA regarding a proposed KMP’s eligibility before making formal appointments. In case a candidate is deemed ineligible, any fresh application must be accompanied by the prescribed application fee.
🔚 Final Thoughts
The issuance of these guidelines by IFSCA marks a positive step towards regulatory transparency, industry consistency, and investor protection. By outlining what qualifies as relevant education and experience for fund managers and compliance leaders, IFSCA is helping FMEs make informed, compliant hiring decisions—a necessity in the increasingly complex world of cross-border fund management.
FMEs and aspiring KMPs are encouraged to review the guidelines thoroughly to align their hiring strategies and career paths with regulatory expectations.