The International Financial Services Centres Authority (IFSCA) has broadened the scope of acceptable certification courses for employees of Fund Management Entities (FMEs) operating in IFSCs. This move, detailed in IFSCA Circular 2026, adds a new option for compliance with mandatory training requirements.
FMEs must now ensure their employees successfully complete one of two specified certificate courses to meet the regulatory mandate under the IFSCA (Fund Management) Regulations, 2025.
What Changed: The 30-Second Answer
The IFSCA, through its circular IFSCA/LEGAL/924 dated August 10, 2026, has expanded the list of approved certification courses for employees of Fund Management Entities in IFSCs. This IFSCA Circular 2026 now recognizes a certificate course from the Institute of Chartered Accountants of India, in addition to the previously specified course from the Institute of Company Secretaries of India, for compliance with sub-regulation (6) of regulation 7 of the FM Regulations, 2025.
Who Does This IFSCA Circular 2026 Apply To?
This circular is explicitly addressed to “All Fund Management Entities in the International Financial Services Centres (IFSCs)”. It directly impacts any FME operating under the International Financial Services Centres Authority (Fund Management) Regulations, 2025 (referred to as “FM Regulations”). Specifically, it concerns the employees of these FMEs who are subject to the certification requirements outlined in sub-regulation (6) of regulation 7 of the FM Regulations.
Essentially, if your entity manages funds within an IFSC, your compliance officers and human resources departments need to be aware of these updated options for employee certification. This IFSCA Circular 2026 provides flexibility in meeting a critical regulatory obligation.
What Are the New Certification Options?
The IFSCA has specified two distinct certificate courses, either of which can be successfully completed to satisfy the requirements of sub-regulation (6) of regulation 7 of the FM Regulations. This update expands the previously singular option.
- The first course, previously specified vide a Circular dated April 01, 2026, is titled “Regulatory Framework for Fund Management in IFSC: AIFs and Retail Schemes” and is offered by The Institute of Company Secretaries of India.
- The second, newly specified course, is titled “Regulatory Framework for Fund Management in IFSC” and is offered by the Institute of Chartered Accountants of India.
As per paragraph 4 of the circular, successful completion of “anyone of the certificate courses referred to in paragraph 2 or 3 above shall be deemed sufficient” for compliance. This means FMEs now have a choice between two reputable professional bodies for their employees’ mandatory training.
What Actions Must Practitioners Take?
Fund Management Entities in IFSCs must immediately review their employee training and certification programs. Given that this circular “shall come into force with immediate effect,” there is no grace period for implementation. Practitioners should:
- Identify Affected Employees: Determine which employees are subject to the certification requirement under sub-regulation (6) of regulation 7 of the FM Regulations.
- Review Existing Certifications: If employees have already commenced or completed the ICSI course, their certification remains valid.
- Update Training Policies: Incorporate the newly approved ICAI course as an acceptable option for future and ongoing employee certifications. This provides flexibility, potentially easing logistical challenges depending on employee preferences or regional availability of training.
- Maintain Records: Ensure robust record-keeping of all successful course completions to demonstrate compliance during regulatory audits. This is crucial for demonstrating adherence to the IFSCA’s expectations, much like maintaining clear audit trails for AML/CFT and KYC guidelines is essential for regulated entities in IFSCs. IFSCA Updates AML/CFT and KYC Guidelines: Key Changes for Regulated Entities in IFSCs.
- Communicate Changes: Inform relevant employees and HR personnel about the expanded options.
The circular explicitly states that “All the other provisions of the Circular dated April 01, 2026 shall remain unchanged.” This reinforces that the core requirement for certification persists; only the options for fulfilling it have been broadened.
What This Circular Does Not Cover
While this circular clarifies and expands the acceptable certification courses, it does not:
- Specify which employees within an FME are mandated to complete these courses. That detail remains within sub-regulation (6) of regulation 7 of the FM Regulations, 2025.
- Provide any new deadlines for employees to complete the certification. The effective date of “immediate effect” refers to the circular’s validity, not a new compliance deadline for individuals.
- Alter the content or structure of the FM Regulations, 2025, beyond this specific aspect of certification.
- Introduce any new penalties for non-compliance. These would be governed by the broader FM Regulations and the IFSCA Act, 2019. For insights into the regulator’s enforcement activities, see IFSCA Publishes Enforcement Actions Log for IFSC-Registered Entities — July 2026.
The Algoy Perspective
While the addition of a second certification option from the Institute of Chartered Accountants of India appears to be a straightforward enhancement of flexibility, FMEs shouldn’t overlook the practical implications. The choice between two courses, even if similar in title, often entails differences in curriculum depth, pedagogical approach, and examination style. Compliance teams need to carefully evaluate both offerings to determine which best aligns with their employees’ existing knowledge base and the specific operational nuances of their fund management activities in the IFSC. It’s not just about ticking a box; it’s about ensuring the chosen course genuinely enhances the regulatory acumen of the workforce. Simply offering a choice doesn’t automatically translate to improved compliance outcomes if the selection isn’t strategic. Smart firms will treat this as an opportunity to review their entire training framework, perhaps even exploring how AI-driven tools could help automate tracking compliance with such certification requirements, much like they’re used to streamline Automating Regulatory Changes: A Simple Guide to Tracking Compliance.
Frequently Asked Questions
Does this circular replace the previous IFSCA circular on certification courses?
No, this circular does not replace the previous IFSCA circular dated April 01, 2026. Instead, it adds a new option for compliance. As stated in paragraph 5, “All the other provisions of the Circular dated April 01, 2026 shall remain unchanged.”
What is the effective date of this IFSCA Circular 2026?
This circular “shall come into force with immediate effect” as per paragraph 6. There is no delayed implementation date; FMEs must consider the new option valid from August 10, 2026.
Which specific regulation mandates these certification courses?
The mandate for specifying certification courses for employees of Fund Management Entities stems from sub-regulation (6) of regulation 7 of the International Financial Services Centres Authority (Fund Management) Regulations, 2025 (“FM Regulations”). This circular is issued under the powers granted by Sections 12 and 13 of the IFSCA Act, 2019, read with the relevant FM Regulations.
Are Fund Management Entities required to make their employees complete both courses?
No, Fund Management Entities are not required to make their employees complete both courses. Paragraph 4 explicitly states that “successful completion of anyone of the certificate courses referred to in paragraph 2 or 3 above shall be deemed sufficient” for compliance.
Sources and Further Reading
- Specification of Certification Course for the employees of Fund Management Entities under the IFSCA (Fund Management) Regulations, 2025
- International Financial Services Centres Authority (IFSCA)
- Search and track this circular on RegChat, Algoy’s regulatory chatbot
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