Expired placement memorandum can be revived: IFSCA allows extension even on a late application, at 50% extension fee plus a late fee the FME must bear
IFSCA may now extend the validity of an expired placement memorandum of a Venture Capital or Restricted Scheme even where the FME applies after expiry. The FME pays an extension fee of 50% of the fresh-filing fee for each six-month period plus a late fee of 50% of that extension fee, cannot make material changes, and cannot pass the late fee to the scheme or investors.
Key facts
- In force
- Immediate effect — circular dated 11 September 2026
- Who it affects
- Fund Management Entities in the IFSC with Venture Capital Schemes or Restricted Schemes whose placement memorandum has expired before first close; their key managerial personnel and investors
- What it is
- Relief
- Section
- FEMA & RBI
- Published
- 11 September 2026
In 30 seconds
- Circular F. No. IFSCA-AIF/120/2026-Capital Markets/11092026 is dated 11 September 2026 and is in force with immediate effect.
- A placement memorandum is valid for twelve months from the date IFSCA communicates that it has been taken on record.
- Extension fee: 50% of the fee for filing a fresh scheme of that nature, for each six-month period.
- Late fee: 50% of the applicable extension fee — borne entirely by the FME.
- No material change in name, investment objective, investment strategy, structure, category or nature of the scheme; otherwise a fresh placement memorandum is needed.
- The extension does not bar IFSCA from acting against the FME or its key managerial personnel for what was done during the expiry period.
हिंदी में सार
IFSCA ने 11 सितंबर 2026 के परिपत्र से तय किया है कि Venture Capital या Restricted Scheme का placement memorandum समाप्त होने के बाद आवेदन करने पर भी उसकी वैधता बढ़ाई जा सकती है। हर छह महीने के लिए नई योजना की फ़ाइलिंग फ़ीस का 50% extension fee और उस पर 50% late fee देनी होगी; late fee पूरी तरह FME को ख़ुद वहन करनी है। योजना के नाम, उद्देश्य, रणनीति, ढाँचे या श्रेणी में कोई बड़ा बदलाव नहीं किया जा सकता। यह तुरंत प्रभाव से लागू है।
Before and now
The application for a six-month extension had to be filed while the placement memorandum was still valid.
IFSCA may also extend an expired placement memorandum on an application filed after expiry, with an extension fee and a late fee.
The background
Under regulations 19 and 31 of the IFSCA (Fund Management) Regulations, 2025, the placement memorandum of a Venture Capital Scheme and of a Restricted Scheme is valid for twelve months from the date the Authority communicates to the Fund Management Entity (FME) that it has been taken on record. Within that period the FME has to declare the first close by achieving at least the minimum corpus.
If the FME fails to reach the minimum corpus in time, the regulations give it the option to extend the validity by six months at a time — but by filing an application while the placement memorandum is still valid.
What IFSCA has now decided
By a circular dated 11 September 2026, the Authority says it has received representations on extending validity even where the application is filed after expiry. It has decided that it may also extend the validity of an expired placement memorandum on a late application, subject to conditions. The circular comes into force with immediate effect.
| Item | What the circular provides |
|---|---|
| Extension fee | 50% of the fee applicable for filing a fresh scheme of that nature, for each six-month extension required |
| Late fee | 50% of the applicable extension fee |
| Who bears the late fee | The FME entirely; it cannot be charged, recovered, reimbursed or passed on, directly or indirectly, to or from the scheme or its investors |
| Period of extension | Ordinarily six months from the day after expiry of the placement memorandum |
| Application made more than six months after expiry | The Authority may grant a longer period made up of additional six-month blocks, on payment of the extension fee and late fee for that period |
Conditions
- The FME shall not make any material change in the placement memorandum with respect to the name, investment objective, investment strategy, structure (open-ended or close-ended), category or nature of the scheme. If there is such a change, a fresh placement memorandum has to be filed under the regulations.
- The FME must furnish any additional information, documents or declarations the Authority requires.
Not a clean slate
An extension granted under the circular is without prejudice to the Authority’s right to take action against the FME and its key managerial personnel for non-compliance with regulatory requirements during the expiry period — in matters such as accepting new capital commitments, issuing units to investors, onboarding new investors or undertaking investments.
What FMEs should do
An FME whose placement memorandum has lapsed without a first close should apply for extension with both fees, confirm that the scheme’s name, objective, strategy, structure and category are unchanged, and budget the late fee as its own cost. The circular is issued under sections 12 and 13 of the IFSCA Act, 2019 read with regulation 146 of the Fund Management Regulations.
Questions and answers
Can an FME extend a placement memorandum that has already expired?
Yes. By the circular of 11 September 2026, IFSCA may extend the validity of an expired placement memorandum even if the application is filed after the validity period, subject to the extension fee, late fee and other conditions.
What does a late extension cost?
An extension fee equal to 50% of the fee for filing a fresh scheme of that nature for each six-month period, plus a late fee equal to 50% of the applicable extension fee.
Can the late fee be charged to the scheme?
No. The late fee is to be borne entirely by the FME and cannot be charged, recovered, reimbursed or otherwise passed on, directly or indirectly, to or from the scheme or its investors.
Can the scheme’s strategy be changed while seeking the extension?
No material change is allowed in the name, investment objective, investment strategy, structure, category or nature of the scheme. For any such change the FME has to file a fresh placement memorandum.
Published 11 September 2026. Updated 6 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.