GIFT City Updates (July 2025)

• Financial Action Task Force (FATF) High risk and other monitored jurisdictions

On July 08, 2025, the Financial Action Task Force (FATF) Plenary released documents titled "High-Risk Jurisdictions Subject to a Call for Action" and "Jurisdictions under Increased Monitoring" with respect to jurisdictions that have strategic Anti-Money Laundering (AML) / Combating the Financing of Terrorism (CFT) deficiencies. The FATF, vide public statement 'High-Risk Jurisdictions Subject to a Call for Action' dated June 13, 2025, has called on its members and other jurisdictions to apply countermeasures, targeted financial sanctions in accordance with UNSC Resolutions, and enhanced due diligence measures proportionate to the risks arising from the jurisdiction with respect to Democratic People's Republic of Korea (DPRK), Iran and Myanmar. Further, FATF also identifies certain jurisdictions under Increased Monitoring to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. As per the latest public statement, the "Jurisdictions under Increased Monitoring" are: Algeria, Angola, Bolivia, Bulgaria, Burkina Faso, Cameroon, Côte d'Ivoire, Democratic Republic of the Congo, Haiti, Kenya, Lao PDR, Lebanon, Monaco, Mozambique, Namibia, Nepal, Nigeria, South Africa, South Sudan, Syria, Venezuela, Vietnam, Virgin Islands (UK), Yemen.

Croatia, Mali, and Tanzania have been removed from the list of Jurisdictions under Increased Monitoring. Such advice does not preclude the regulated entities licensed/recognized/registered or authorized by IFSCA from legitimate trade and business transactions with the countries and jurisdictions mentioned here. CLICK HERE

• Public Advisory: Safeguard Yourself Against Online Scams & Frauds

On July 09, 2025 the IFSCA, as a unified financial sector regulator, is committed to protecting consumers availing financial services in the IFSC. With increasing reliance on social media platforms like WhatsApp, X, LinkedIn, Telegram, and YouTube, there is a growing risk of frauds and scams targeting unsuspecting consumers. In light of global regulatory concerns, including IOSCO's statement dated May 21, 2025 on "Combatting Online Harm and the Role of Platform Providers," IFSCA urges financial consumers to stay vigilant and follow essential safety practices. These include avoiding unsolicited investment offers promising unrealistic returns, verifying identities to avoid impersonation of IFSCA officials or executives using deepfakes or fake profiles, and ensuring the offering entity is registered or licensed with IFSCA via the official directory IFSCA Directory. Names and official contact details of IFSCA officials can be verified here - IFSCA Management Team. All official communications from IFSCA are sent via emails ending with @ifsca.gov.in. Consumers should conduct due diligence before entering any transaction and promptly report any suspicious or unregulated activity related to GIFT IFSC to the pision of Consumer Education and Protection, IFSCA. CLICK HERE

• Regulatory action(s) against certain Fund Management Entities for noncompliance with IFSCA (Fund Management) Regulations, 2025

On July 18, 2025, the IFSCA had conducted a series of supervisory measures, including multiple surprise visits to office premises of Fund Management Entities (FMEs) operating in GIFT IFSC, to assess compliance with the IFSCA (Fund Management) Regulations, 2025. These visits aimed to verify the presence of Key Management Personnel (KMPs) at designated offices, as required under Regulation 7(5), which mandates KMPs be based out of the IFSC, and Regulation 10(1), which requires FMEs to maintain adequate infrastructure aligned with their operational size. In the latest round of visits, several FMEs were again found with offices either closed or unattended during operational hours and/or without KMPs present. In light of persistent non-compliance, IFSCA is initiating regulatory actions against nine FMEs in the IFSC. IFSCA reaffirms its commitment to upholding high regulatory standards and advises all FMEs to maintain fully functional offices and ensure KMP presence as mandated. CLICK HERE

• Report of the Working Group to study on Alternate Risk Transfer (ART) arrangements submitted to IFSCA

On July 30, 2025, the Working Group (WG) constituted by IFSCA to study Alternate Risk Transfer (ART) arrangements had submitted its report to the Chairperson, IFSCA. The WG, chaired by Shri G. Srinivasan, MD & CEO of Galaxy Health Insurance Company Ltd. and former CMD of New India Assurance Company, was formed in view of increasing catastrophic events driven by climate change and urbanization. The Group explored the feasibility of issuing insurance-linked securities (ILS), such as catastrophe bonds, from GIFT IFSC. Its terms of reference included reviewing global ART frameworks, studying regulatory practices in jurisdictions like Bermuda, Singapore, and Hong Kong, and advising IFSCA on structuring ART in India. The report highlights GIFT IFSC's potential as a hub for ILS and recommends, inter alia, the setup of Special Purpose Insurers (SPIs), enabling ART risk acceptance under IFSCA and IRDAI regulations, establishing a framework for ILS issuance, restricting ILS sales to Qualified Investors, and defining reporting and disclosure norms. CLICK HERE

• International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025

The International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025, took effect from July 8, 2025 (published on 23 July 2025). These regulations provide a comprehensive regulatory framework for entities providing TechFin and Ancillary Services that support financial services as defined under the IFSCA Act, 2019. Key provisions include mandatory registration through the Single Window IT System (SWIT), eligibility criteria for applicants, "fit and proper" requirements, Code of Conduct, operational norms including currency of operations in specified foreign currencies, and restrictions on types of services. Existing entities authorized under previous circulars must obtain registration under these regulations within 12 months (extendable up to 24 months). The First and Second Schedules specify permitted Ancillary and TechFin services, while the Third Schedule outlines prohibited services. CLICK HERE

• International Financial Services Centres Authority (Procedure for making regulations and subsidiary instructions) Regulations, 2025

The International Financial Services Centres Authority (Procedure for making regulations and subsidiary instructions) Regulations, 2025 took effect from July 21, 2025. These regulations establish a standardized and transparent framework for the formulation, consultation, approval, amendment, and review of regulations and subsidiary instructions issued by IFSCA under the IFSCA Act, 2019.

Key provisions include mandatory public consultation through publication of consultation papers, detailed procedures for approval of regulations and subsidiary instructions, timelines for receiving public comments, and mechanisms for stakeholder engagement. The regulations also provide for the constitution of expert and independent review committees, as well as exemptions from public consultation in cases of exigency or matters relating to market integrity or national security. The regulations mandate a five-year periodic review of all regulations and allow for amendments following prescribed procedures. The 2025 regulations repeal the earlier IFSCA (Procedure for Making Regulations) Regulations, 2021, while preserving continuity for all actions and instructions issued prior to their commencement. CLICK HERE

• International Financial Services Centres Authority (Fund Management) (Amendment) Regulations, 2025

The International Financial Services Centres Authority (Fund Management) (Amendment) Regulations, 2025 took effect from July 24, 2025. These amendments introduced a dedicated regulatory framework for Third-Party Fund Management Services within the IFSC, as part of Chapter VI of the principal regulations. Key provisions of the new Part D include eligibility conditions for third-party fund managers, mandatory authorisation from IFSCA, enhanced compliance and risk management obligations, governance norms including appointment of Principal Officers and Key Managerial Personnel, as well as an additional net worth requirement of USD 500,000 for Fund Management Entities (FMEs) offering these services. The regulations also prescribe detailed disclosures to investors, clear allocation of responsibilities between FMEs and third parties, and conditions under which the FME remains fully liable for all obligations under the arrangement. A maximum corpus limit of USD 50 million per scheme has been specified, unless otherwise notified. These amendments aim to facilitate global fund structuring models while ensuring strong investor protection and accountability standards within the IFSC ecosystem. CLICK HERE

• Guidelines on Ascertaining KMP Eligibility in Accordance with Regulation 7 of the IFSCA (Fund Management) Regulations, 2025 ("FM Regulations")

On 25 July, 2025 the IFSCA issued guidelines on ascertaining the eligibility of Key Managerial Personnel (KMPs), specifically Principal Officers (POs) and Compliance Officers (COs), under Regulation 7 of the IFSCA (Fund Management) Regulations, 2025. These guidelines aim to provide clarity and consistency for Fund Management Entities (FMEs) operating in the IFSC while making KMP appointments. Key provisions include educational qualifications such as a professional or postgraduate degree in relevant fields (finance, law, economics, etc.), with a relaxation for POs having over 15 years of relevant experience. Further, a minimum of five years' experience in securities market or financial products is required, with up to two years of consultancy experience permitted. Roles in regulated entities such as AIFs, mutual funds, broker-dealers, CRAs, MIIs, and financial sector regulators (including foreign equivalents) are considered eligible, while experience in non-core areas like IT or proprietary trading is excluded. FMEs are advised to seek prior confirmation from IFSCA on KMP eligibility, and in cases of rejection, reapplication must be submitted with the applicable KMP fee. The guidelines aim to enhance transparency and ensure regulatory alignment in senior-level appointments across fund management operations in GIFT IFSC. CLICK HERE

• Guidance on submission of requests pertaining to changes requiring prior approval/ intimation to the Authority.

Vide Circular efile No. IFSCA-FCR0FCR/5/2025-Banking/01 dated July 1, 2025, the IFSCA issued a circular providing detailed guidance for Finance Companies (FCs) and Finance Units (FUs) regarding submission of requests that require prior approval or intimation to the Authority under the FC Regulations, 2021. The circular outlines the process and mandatory documentation for various types of requests, including changes in management or control, name changes, broadening of activities, voluntary surrender of registration, and pre-facto waivers or exemptions. It specifies the respective IFSCA pisions to which requests should be submitted, based on their nature, and prescribes fees and supporting documents like formal request letters, board resolutions, shareholding details, financials, and compliance confirmations. The annexure attached to this circular further includes formats such as the Information on Management form and a Voluntary Surrender form to standardize submissions. This circular aims to ensure transparency, uniformity, and regulatory compliance while facilitating ease of doing business for regulated entities in the IFSC. CLICK HERE

• Framework for Transition Bonds

Vide Circular F. No. IFSCA-DSF0SFHB/2/2025-Capital Markets dated July 29, 2025, the IFSCA had issued a circular notifying the Framework for Transition Bonds in GIFT-IFSC. This framework aims to facilitate capital raising by hard-to-abate sectors transitioning toward low-carbon operations, supporting India's broader climate goals and net-zero commitments. The new framework formally recognizes Transition Bonds as ESG-labelled debt securities under the IFSCA (Listing) Regulations, 2024. It is based on global best practices, public feedback, and the recommendations of IFSCA's Expert Committee on Climate Finance.

The IFSCA's transition finance framework is designed to drive ESG capital into India and emerging markets by supporting scientifically aligned climate transition efforts. It mandates that funds be directed solely toward "transition" activities recognized under global taxonomies like the EU Taxonomy and IEA roadmaps. Issuers must submit a Paris-aligned transition plan, supported by governance, risk management, and stakeholder strategies. Independent external validation through Second Party Opinions or Certifications is required, alongside detailed disclosures on emissions targets, CapEx, and carbon offsets, aligned with global standards such as SBTi and ISSB. Adoption of digital MRV tools is encouraged to ensure transparency and traceability. This regulatory framework aims to unlock ESG capital flows toward India and emerging markets by facilitating scientifically aligned, credible climate transition pathways for industries currently lacking access to green finance. CLICK HERE

• Transition to IFSCA (TechFin and Ancillary Services) Regulations, 2025

Vide Circular Ef. No. IFSCA-GIC/1/2024-CM dated July 31, 2025, the IFSCA issued a circular outlining the transition process under the IFSCA (TechFin and Ancillary Services) Regulations, 2025, which came into effect on July 8, 2025. The circular provides clarity on the treatment of new applications, pending approvals, and existing entities under earlier frameworks.

Key highlights include:

New applicants can now apply for registration as TechFin and Ancillary Service Providers (TAS Providers) via email, using the format specified in Annexure-I of the circular. The fee structure is outlined in Annexure-II. Pending applications under the earlier FinTech or Ancillary Services frameworks will now be processed in accordance with the TAS Regulations, 2025. No additional fees are required where already paid under the old frameworks. Entities with in-principle approvals under previous frameworks must obtain a Certificate of Registration (CoR) under the TAS Regulations within 12 months from the date of notification (i.e., by July 8, 2026), unless extended by IFSCA. Existing authorized entities may continue to operate under the previous frameworks during the transition period or until the CoR is granted under the new regulations, whichever is earlier. The circular has been issued under Section 12 of the IFSCA Act, 2019, and Regulations 6 and 15 of the TAS Regulations, 2025. CLICK HERE

• International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025

On July 10, 2025, the IFSCA notified to establish a comprehensive regulatory framework for entities providing technology-driven financial services (TechFin) and ancillary support services in IFSCs under the TechFin and Ancillary Services Regulations, 2025 effectivw from July 8, 2025. These regulations mandate that entities must register with the Authority before commencing operations and define eligibility criteria, including legal form, promoter background, and jurisdictional compliance. The regulations identify a wide range of permitted services under Ancillary and TechFin categories, while explicitly prohibiting certain services such as facility management and core regulated financial activities. It outlines a structured application process via the Single Window IT System (SWIT), encompassing in-principle approval, registration timelines, and conditions for ongoing compliance. The framework also stipulates 'fit and proper' criteria for key personnel, mandates the appointment of principal and compliance officers based in IFSC, and sets rules for providing services only to eligible non-resident clients, with limited exceptions. Financial operations are to be conducted in specified foreign currencies, and TechFin and Ancillary Service Providers must adhere to reporting obligations, a code of conduct, and inspection protocols. Existing service providers operating under prior circulars must transition to this regulatory regime within 12–24 months. The framework aims to promote innovation, ensure regulatory clarity, and facilitate the growth of technology and support services within the IFSC ecosystem. CLICK HERE

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.