The Government of India has notified the Special Economic Zones (Fourth Amendment) Rules, 2026, introducing important changes for units and funds established in an International Financial Services Centre (IFSC).
Published on October 15, 2026, the notification introduces several clarifications relevant to fund managers, Fund Management Entities (FMEs) and IFSC ecosystem participants.
Here are the key changes:
🔹 1. Simplified space documentation for fund setup
A provisional offer of space confirmed in writing by the developer for the Fund Management Entity will qualify as the provisional offer of space for setting up a fund in an IFSC.
🔹 2. Clarity on lease deeds
The lease deed executed by the Fund Management Entity will be considered the lease deed of the fund it manages.
🔹 3. Commencement of service activity
For an IFSC unit, the date of grant of its first final recognition, registration, licence or authorisation by IFSCA will determine the commencement date of its service activity under the amended rules. The notification also clarifies that this commencement date remains unchanged even if the underlying authorisation subsequently ceases to be valid.
🔹 4. Letter of Approval renewal criteria
Renewal of a Letter of Approval for an IFSC unit will be decided based on IFSCA’s recommendations, taking into account:
• Employment generated
• Violations of applicable laws relating to the unit’s functioning
• Defaults in statutory payments, if any
🔹 5. Clarification on fund-related requirements
The amendment also provides that Rule 22(3) will not apply to a fund set up in an IFSC.
What does this mean for fund managers?
These amendments provide greater clarity on documentation, commencement of operations and approval renewals for the IFSC ecosystem. Fund managers planning to establish or operate funds in GIFT City should review their setup documentation and compliance processes in light of the amended rules.
Source: Ministry of Commerce and Industry, Government of India — Special Economic Zones (Fourth Amendment) Rules, 2026, G.S.R. 895(E), dated October 15, 2026.
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