IFSCA Bars Multiple Fiduciary Roles in Same Scheme

The International Financial Services Centres Authority (IFSCA) has issued a clarification on governance of schemes in IFSCs, mandating strict segregation of fiduciary roles to strengthen oversight and prevent conflicts of interest.

1. Segregation of Fiduciary Functions

The clarification provides that:

• Fund Management Entities (FMEs) shall not appoint the same fiduciary to perform multiple roles for a single scheme
• Specifically, a fiduciary cannot simultaneously provide:

1. 1. Fund administration
   2. Valuation services
   3. Audit services
   4. Financing services

2. Objective of the Clarification

The measure aims to:

• Prevent conflict of interest
• Ensure independent functioning of key service providers
• Strengthen governance and investor protection

3. Compliance Requirement for Existing Schemes

• Existing schemes must align with the new requirements
• The deadline for compliance is 30th September 2026

4. Regulatory Impact

The clarification ensures:

• Greater transparency and accountability
• Improved checks and balances in fund operations
• Enhanced trust in IFSC fund structures

5. Conclusion

This clarification reinforces IFSCA’s focus on robust governance standards, ensuring that fiduciary roles remain independent and conflict-free, thereby safeguarding investor interests in IFSC schemes.