FATCA (short for Foreign Account Tax Compliance Act) is a regulation created by the US Government to curb tax evasion by US citizens. 

India has signed a reciprocal agreement with the US government to share information (assets held by US citizens in India and vice versa). Therefore, all financial institutions (such as mutual funds) have to identify the citizenship and tax status of their investors and provide the necessary information to the government. 

If you are a  U.S. taxpayer who holds foreign financial assets with an aggregate value of more than the reporting threshold, certain information such as your financial transactions will be shared with the US govt. You have to submit a self-certification of FATCA letting Arihant know if you qualify for FATCA.