GIFT City Updates (October 2025)

CIRCULARS

• Foreign Currency Settlement System - Notification of Bye-laws, Rules and Regulations

On October 3, 2025, a circular was issued by the International Financial Services Centres Authority (IFSCA) to all financial institutions in GIFT IFSC, providing CCIL IFSC Limited (CIL) with authorization to establish a Foreign Currency Settlement System for the settlement of foreign currency transactions in GIFT City. The authorization has been given under Section 7 and Section 10 of the Payment and Settlement Systems Act, 2007, in conjunction with Regulation 6 and Regulation 9 of the IFSCA (Payment and Settlement Systems) Regulations, 2024, as well as Section 12 and Section 13 of the IFSCA Act, 2019. In addition, the Authority has formally notified the Bye - Laws, Rules and Regulations prepared by CIL to govern the operational framework, compliance framework, risk management framework and instructions of the system, available in the "Legal Framework" section of the CIL/POL website. This is an important milestone in stabilizing the settlement infrastructure for GIFT IFSC, improving the efficiency of cross-border financial transactions, enhancing transparency, and lowering settlement risk for the IFSC while simultaneously enhancing the International Financial Services Centre's (IFSC) convergence with best standards of global financial market infrastructure. The IFSC's sustained commitment to financial institutions within the international financial market ecosystem that operate out of GIFT IFSC within the area will continue. Click here

• Circular on Foreign Currency Settlement System– Instructions for IFSC Banking Units

On 7 October 2025, the International Financial Services Centres Authority (IFSCA) published a circular to all IFSC Banking Units, announcing the launch of the Foreign Currency Settlement System (FCSS)p. CCIL IFSC Limited (CIL) has been authorised to carry on the FCSS under Section 7 and Section 10 of the Payment and Settlement Systems Act, 2007, Regulation 6 and Regulation 9 of the IFSCA (Payment and Settlement Systems) Regulations, 2024, and Sections 12 and 13 of the IFSCA Act, 2019. CIL has also entered into a partnership with Standard Chartered Bank, IFSC Banking Unit (SCB-IBU), which will act as the settlement bank for FCSS. IFSCA has issued the Bye-Laws, Rules and Regulations for FCSS, which describe relevant features of FCSS that include such features as settlement of foreign currency transactions, initially, to USD only; gross settlement mechanism; operating hours from 08:00 to 20:00 IST on all business days; and in line with ISO 20022 messaging standards. IFSC Banking Units may apply for membership based on access criteria specified in the BRR; direct applications must be through CIL; comply with operational requirements, and follow IFSCA instructions. This circular is issued under Section 18 of the Payment and Settlement Systems Act, 2007, reinforcing the legal basis of the settlement infrastructure and contributing to the development of efficient, secure cross-border payment operations within GIFT IFSC. Click here

• Circular for Import of gold or silver by Qualified Jewellers and TRQ holders through IIBX - consolidation and amendment

On October 10, 2025, the International Financial Services Centres Authority (IFSCA) published a circular updating and clarifying the existing framework for the importation of gold and silver into India through the India International Bullion Exchange (IIBX) located in GIFT IFSC. The circular brings together prior guidelines as well as clarifying and expanding the eligibility criteria for Qualified Jewellers. Jewellers can be identified as Qualified Jewellers if they: are engaged in the jewellery business, are compliant with GST requirements, have a minimum net worth of ₹15 crore, and have met the relevant turnover conditions. Once jewellers have been recognised as Qualified Jewellers, they are eligible to trade Switzerland listed gold on IIBX, using a bullion trading member, or as a "special category" client in their own right. The circular also makes clear that if a jeweller does not meet the net worth requirement, their Qualified Jeweller designation can be suspended. The circular further clarifies that entities having valid Tariff Rate Quota (TRQ) licenses under the India-UAE CEPA can import UAE Good Delivery (UAEGD) gold through IIBX. Such entities are entitled to purchase gold through bullion trading members as long as they maintain a valid TRQ license. Onboarding, documentation, and compliance will be conducted by IIBX and the India International Depository (IFSC) Ltd jointly.

The circular also puts rules in place for advance remittance and the purchase of Bullion Depository Receipts (BDRs). Qualified jewellers will be able to place a "buy" order only - any advance payment that goes unused will need to be returned to the bank within eleven days. All involved accounts will be ring-fenced to prevent misuse. Other obligations of the stakeholders will include following the Anti-Money Laundering, Counter-Terrorist Financing and KYC guidelines laid down under Indian law, as well as the regulations of the IFSCA. IIBX will supervise developments and maintain market integrity within the bullion ecosystem and must report transaction data to IFSCA on a monthly basis.

This circular supersedes many prior circulars, lowers barriers to access for stakeholders and has centralised instructions into a single circular. These revisions will help jewellers, TRQ holders, clearing members, vault managers and other participants in the bullion market to easily read and understand their obligations. Click here

• Governing Board of the Market Infrastructure Institutions (MIIs)

On October 13, 2025, the International Financial Services Centres Authority (IFSCA) is issuing a circular to all Market Infrastructure Institutions (MII) in GIFT IFSC regarding the structure and governance of their Governing Boards. The circular underscores the importance of the qualifications and experience of board members, with particular reference to capital markets, finance, legal and regulatory practice, technology and risk management. Further, it mandates that at least one Public Interest Director (PID), be represented on the Governing Boards in each of these four areas of expertise. The circular institutionalises the process of appointing PIDs by directing the Nomination and Remuneration Committee (NRC) to provide a shortlist of at least two suitable candidates for each vacancy based on educational background and professional and suitability. The Governing Board must then independently consider candidate profiles before submitting them to IFSCA for final approval. IFSCA retains the right to solicit further names, or to unilaterally appoint PIDs (if necessary).

The circular also outlines that MIIs will collect certain documents and declarations from shortlisted candidates, which include the candidates' previous employment history, directorships, compliance with regulations, conflict-of-interest disclosures, and any legal action taken. In the case of a reappointment of current PIDs, MIIs will apply at least 2 months before the expiration of the term, taking into account diversity of experience, past performance, and committee involvement. Current PIDs may continue to serve for a short period after the expiration of the term, if they are necessary in order to satisfy regulatory board composition requirements. The circular goes on to require MIIs to develop reasonable and clear policies for the performance review process for PIDs, which must include, at minimum responsibility for past responsibilities, knowledge of the domain, a mix of skills, and personal characteristics. MIIs must also provide an annual training program to keep PIDs up to date with technology, regulatory responsibilities and capital market resources.

Issued under the IFSCA Act, 2019, and the MII Regulations, this circular aims to strengthen governance, ensure professional oversight, and maintain high standards of integrity and competence within the IFSC ecosystem. Click here

• Framework on Stewardship Code in IFSC

On October 23, 2025, the International Financial Services Centres Authority (IFSCA) published a circular that established a Stewardship Code for all fund management entities and institutional investors based in GIFT IFSC. This initiative is intended to enhance investor protection, stimulate responsible stewardship over investee companies, and foster long-term value creation through improved corporate governance. This framework encourages fund managers and institutional investors—including AIFs and Retail Funds—to adopt a stewardship policy that clearly articulates their governance culture, investment philosophy, monitoring mechanisms and approach in managing conflicts of interest. They may determine to align with the model code in the circular, or alternatively a stewardship code from any of the regulators, including SEBI, IRDAI, PFRDA or a recognised professional body, as long as it adheres to the core principles set by the IFSCA. Once accepted, these entities will be expected to disclose the policy on their website, and report on a regular basis on their stewardship, and conduct periodic reviews of their stewardship and the effectiveness of their approach.

The circular sets out seven principles, such as ongoing engagement with investee companies, engaging responsibly when necessary, voting transparently, managing conflicts of interest, collaborating with other investors where appropriate, and timely disclosures to stakeholders. It can be considered a report at least in part in that it states investors are obligated to act to ensure companies are engaged on issues impacting performance, governance, ESG risks, and shareholder value, while preserving confidentiality and not misusing inside information. It also requires documents of interventions and voting decisions and to the extent necessary, reasonable explanations. Periodic training is also required for staff members involved in stewardship work, with the purpose of ensuring informed and responsible decision making. This framework which is issued under the IFSCA Act, 2019 and Fund Management Regulations intends to create a more accountable, transparent and more resilient investment ecosystem at GIFT IFSC. Click here

• Modifications under the International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022.

The International Financial Services Centres Authority (IFSCA) has circulated a circular dated October 31, 2025, with amendments to its Anti-Money Laundering, Counter-Terrorist Financing and Know Your Customer Guidelines, 2022. The amendments mainly enhance the Video-based Customer Identification Process (V-CIP), implemented by regulated entities to onboard new customers, as well as to update their KYC records. The circular now accommodates V-CIP being carried out by not just the officials of the regulated entity, but also by financial group entities that are incorporated in India and regulated by a financial regulator, or registered by a KYC Registration Agency. A list of new technology and security requirements has been added, including end-to-end encryption, cyber-security compliance, anti-spoofing and anti-deep-fake controls, geo-tagging, liveness checks, and prevention of access from spoofed IP addresses. Finally, all video footage and data must be stored on a server owned or leased by the regulated entity, or its financial group, and a third-party service provider cannot retain such footage or information.

There are extra safeguards that control Aadhaar verification, PAN validation, confirmation of address, address of disruptions in video calls and detection of suspicious behaviours. All V-CIP accounts will require concurrent audit before being activated. The circular also provides a pilot provision for low-risk Non-resident Indians of particular approved jurisdictions (including the US, UK, UAE, Singapore, Germany, Australia etc.) to be onboarded via V-CIP once the IP address comes from these jurisdictions, and their bank account in that jurisdiction is verified. These accounts will stay in debit-freeze mode until the first credit comes from the verified bank account outside India. These changes aim to provide better security and enable onboarding in a remote setting, reduce fraud and improve compliance in the IFSC ecosystem. This circular is effective immediately and may extend to more jurisdictions after a 4-month pilot phase. Click here

PRESS RELEASE

• Constitution of the Payments Regulatory Board

On October 1, 2025, the International Financial Services Centres Authority (IFSCA) issued a press release announcing the formation of the Payments Regulatory Board (PRB) under Section 3 of the Payment and Settlement Systems Act, 2007, as amended by the Finance Act, 2017 and notified by the Government of India on May 9, 2025. The PRB replaces the earlier Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) and will now be responsible for exercising oversight and regulatory powers under the PSS Act within GIFT IFSC. The Board consists of six members, including the Chairperson and a Whole-Time Member of IFSCA, the Head of the Department of Banking Regulation and Development at IFSCA, a Joint Secretary or Economic Advisor from the Department of Financial Services (Cyber Security and Fintech division), the CEO of the Unique Identification Authority of India, and the Managing Director and CEO of the National Payments Corporation of India. In its first meeting held on October 1, 2025, the PRB approved the authorization of CCIL IFSC Limited to operate a real-time gross settlement-based Foreign Currency Settlement System within IFSC, marking a key step in strengthening payments infrastructure in GIFT City. Click here

• Message from Mr. K Rajaraman, Chairperson, IFSCA on the occasion of IOSCO World Investor Week, 2025

On October 6, 2025, the Chairperson of the International Financial Services Centres Authority (IFSCA), Mr. K. Rajaraman delivered a message to commemorate IOSCO World Investor Week 2025. He mentioned the impressive growth of GIFT IFSC in the 5 years since the establishment of IFSCA as a consolidated financial regulator. Mr. Rajaraman mentioned that almost 1,000 entities were registered across sectors such as capital market, fund management, insurance, and banking. While speaking about India's vision of "Viksit Bharat @ 2047," he also focused on the need to develop global confidence, transparency and provide robust investor protection as essential imperative to attract foreign capital inflows. This year's Investor Week had participation from market infrastructure institutions and other interested stakeholders on key themes including Technology and Digital Finance, Artificial Intelligence, and Fraud and Scam prevention. Mr. Rajaraman emphasized the need to bring awareness related to the risks and opportunities arising from these technologies, especially at a time when digital finance is growing at rapid pace. He also covered the large and diverse stakeholder base in GIFT IFSC consisting of over 11,500 NRI and foreign retail depositors, over 3,500 AIF investors and over 15 lakh retail investors accessing global markets, re-iterating that their protection continues to be a priority. During the week, IFSCA will also release the "Stewardship Code" and "Consumer Charter" to further strengthen investor rights. Given the current geopolitical landscape, I would also like to take this opportunity to encourage all stakeholders to propose innovative or out-of-the box ideas as part of Next- Generation Reforms in the IFSC in keeping with the IFSCA motto: आ नो भद्राः क्रतवो यन्तु विश्वतः ।। i.e., Let noble thoughts come to us from all directions.

He conveys his best wishes to consumers and investors in the GIFT IFSC ecosystem all the stakeholders who are participating in the IOSCO World Investor Week, 2025. Click here

• Hon'ble Finance Minister launches the Foreign Currency Settlement System at GIFT IFSC

On October 7, 2025, the Hon'ble Finance Minister Smt. Nirmala Sitharaman officially launched the Foreign Currency Settlement System (FCSS) of GIFT IFSC at the Global Fintech Festival in Mumbai. The FCSS is a payment system authorized by IFSCA under the Payment and Settlement Systems Act, 2007, allowing foreign currency transactions between IFSC Banking Units to settle locally instead of solely via the correspondent banking route. The FCSS will start with USD transactions and is expected to eventually facilitate other currencies. Unlike the traditional settlement arrangement, which involves several banks and can involve SWIFT confirmations delaying settlement for 36-48 hours, the FCSS reduces settlement time significantly - by using a designated local settlement bank to route the payment. CCIL IFSC Limited, a subsidiary of Clearing Corporation of India, has been authorized as the system operator and Indian Financial Technology & Allied Services (IFTAS) developed the core software. The local settlement bank has been awarded via an open bidding process to Standard Chartered Bank in its IFSC unit. The Chairperson of IFSCA, Shri K. Rajaraman, said that the FCSS is a key milestone in enabling GIFT IFSC to position itself in the same space as global financial centres such as Tokyo, and Hong Kong by making foreign currency settlements faster, safer and more cost-effective while reducing settlement risk. Representatives from CCIL IFSC and Standard Chartered Bank expressed confidence that the system will strengthen India's financial ecosystem and support innovation across cross-border payments and market infrastructure. Click here

• Consultation paper on Regulatory Framework for differential distribution in Restricted Schemes and Venture Capital Schemes to facilitate blended finance and other fund structures

On October 23, 2025, the International Financial Services Centres Authority (IFSCA) announced in a press statement that it had published a consultation paper that proposed a regulatory framework of differential distribution for Restricted Schemes and Venture Capital Schemes. This supports the Government of India's vision to make GIFT IFSC a global destination for sustainable finance, particularly given the estimated USD 10-20 trillion needed for India to achieve its climate and net-zero objectives. This framework aims to facilitate blended finance structures that combine public or philanthropic capital with private capital to unlock deeper pools of capital. It allows fund managers greater flexibility in developing innovative fund vehicles that appeal to a variety of investors (e.g., institutional, philanthropic, or impact-driven), while ensuring adequate protections and transparency to meet the investors' needs. The press statement noted the GIFT IFSC fund management ecosystem has been growing rapidly, reporting 177 registered fund management entities with 272 schemes and USD 22.11 billion in commitments as of June 30, 2025. IFSCA has requested feedback and comments on the proposal from the stakeholder and public until November 11, 2025. The consultation paper can be found on the IFSCA website. Click Here

REGULATIONS

• IFSCA (Listing) (Amendment) Regulations, 2025

On October 13, 2025, the International Financial Services Centres Authority (IFSCA) notified the IFSCA (Listing) (Amendment) Regulations, 2025, introducing several changes to the existing Listing Regulations, 2024. The amendments primarily extend certain compliance timelines and update numerical thresholds to provide additional flexibility to listed entities operating in GIFT IFSC. Notably, the deadline in Regulation 16(8) has been increased from 135 days to 180 days, allowing more time for the completion of specific listing-related requirements. In multiple regulations- 25(2), 52(3), and 65, the reference to "five" has been replaced with "eight," thereby extending applicable procedural timelines or quantitative thresholds depending on the regulatory context. Additionally, Regulations 96(2) and 107(2) have been updated to clarify that listed entities must disclose their financial statements for the first half of the financial year to recognised stock exchanges immediately after board approval, but no later than 45 days after the end of the half-year period. These amendments aim to streamline disclosure requirements, improve regulatory clarity, and reduce compliance pressure on listed entities in the IFSC ecosystem. Click here

• IFSCA (Listing) Regulations, 2024, as amended up to October 14, 2025

On October 28, 2025, the International Financial Services Centres Authority (IFSCA) gave effect to changes to the IFSCA (Listing) Regulations, 2024, which regulate the listing of common and other financial instruments, in emerging International Financial Services Centres (IFSCs), including GIFT City, on recognised stock exchanges or on those platforms approved by the competent authority of the IFSCA. These regulations are intended to provide transparency, protect the interest of investors and ensure the adequate disclosure of information by corporations and entities desiring to list their securities.

The regulations address the listing of equity shares, debt securities, depository receipts, commercial papers, certificates of deposit and other financial products as authorized. The rules also provide the opportunity for companies incorporated in India, the IFSC or jurisdictions recognised by the IFSC to list their securities in the IFSC, where applicable; subject to compliance with applicable laws of the jurisdiction they are incorporated in. The regulations do not allow companies which are debarred, wilful defaulters or fugitive economic offenders to list.

The draft rules contemplate a detailed public issue process inclusive of public offering document filing of the draft offering document, public disclosures (including risk factors, financials, litigation, management disclosures). The rules also govern the offer price, minimum subscription, appointment of lead managers, timeline for allotment and reporting for listing purposes. Importantly, the draft rules place a significant focus on the audited financial statements (not older than 180 days) as well as for disclosures to be complete, accurate, and reliable.

Special provisions are introduced for Special Purpose Acquisition Companies (SPACs), enabling them to raise funds without having an identified business at the time of listing. SPACs must keep IPO proceeds in escrow, have shareholder redemption rights, and complete a business combination within 36 months, failing which funds are returned. Sponsors must maintain mandated shareholding percentages with lock-ups.

The regulations also facilitate secondary listings of securities already listed abroad, preferential issues, qualified institutional placements, rights issues, and listing of depository receipts. Debt securities may be issued through standalone or medium-term note programs, subject to proper disclosure, credit rating, and trustee appointment.

Additionally, the framework covers ESG-labelled debt securities, requiring external reviewers, annual impact reporting, and alignment with recognised global sustainability standards. Issuers must disclose use of proceeds, project details, and environmental or social impact metrics.

Finally, continuous disclosure obligations are strengthened to ensure timely, fair, and transparent communication with investors. Listed entities must comply with accounting standards, avoid misrepresentation, and act in shareholders' best interests. Click here

PUBLIC CONSULTATIONS

• Consultation Paper on Master Circulars for Stock Exchanges and Clearing Corporations in the IFSC.

The International Financial Services Centres Authority (IFSCA) has published a public consultation document to obtain responses on a draft Master Circular that compiles and simplifies all regulatory guidance for Stock Exchanges and Clearing Corporations within the IFSC regime in India, which is primarily applicable to GIFT City. This draft document has been developed as part of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations 2021, as amended in 2024, which introduces a single regulatory framework for Market Infrastructure Institutions (MIIs). IFSCA is empowered by Regulation 72 to issue norms and guidelines through circulars and Regulation 73(5) stipulates any SEBI circulars that are applicable remain so, until superseded by IFSCA.

Over the years, SEBI and IFSCA have issued various circulars in relation to the recognition of MIIs, negotiated large trades, business continuity plans, liquidity enhancement, disclosure, committees, direct market access and contributions to the settlement guarantee fund. The purpose of the Master Circular is to replace all of the above circulars and consolidate them into a single and consolidated regulatory document with the intent of promoting consistency, reducing duplication, and enhancing compliance. Notably, anything done before the introduction of the Master Circular under any previous circular, would continue to remain valid.

The consultation paper contains important procedural expectations such as application format for recognition and renewal, payment procedures for the fee, continuous disclosure, director and key personnel governance, risk-management practices, technology requirements, surveillance methods, disaster-recovery preparedness, and audit obligations. In addition, it provides clarity on operational market services, including circuit breakers, margin trading, unique client identifiers, negotiated large trades, proprietary trading disclosures, systems audits, co-location services, and trading technology approval. The objective is to uphold orderly trading, protect investors, provide equitable access, and mitigate settlement risk, all within the IFSC ecosystem.

Stakeholders including stock exchanges, clearing corporations, broker-dealers, investors, and technology providers are asked to provide structured comments on the draft by October 22, 2025, to the relevant IFSCA staff. This consultation is part of IFSCA's accountability, transparency, good governance, risk-based supervision, and alignment with international standards as India aims to implement its vision to develop GIFT IFSC as a world-class, globally competitive international financial center. Click here

• Public Consultation on amendment to IFSCA Banking Handbook: COB Directions on restrictions by the Authority on the activity of providing credit.

On October 16, 2025, the International Financial Services Centres Authority (IFSCA) published a Public Consultation Paper suggesting changes to the prohibitions on lending activities, as provided for in Module 16 (Providing Credit) of the IFSCA Banking Handbook under the Conduct of Business (COB) Directions. The proposed changes lay a basis for the regulatory powers provided by the Banking Regulation Act, 1949, the IFSCA (Banking) Regulations, 2020 and sections 12 and 13 of the IFSCA Act, 2019. The suggested changes were informed by feedback provided by the regulated sector and are designed to align IFSC banking activities with international norms, including Basel standards.

The first proposed change relates to lending to directors of the parent banking company and their related parties. Previous amendments had explicit prohibitions in these situations. The proposed changes now allow loans to directors of the parent banking company and their related parties under strong governance requirements. An International Banking Unit (IBU) must have a clear policy on related party lending, must ensure that loans to related parties are free of conflicts of interest, that loans to related parties do not contain preferential conditions, and that the beneficiaries of the loans or their family members do not participate in the loan approval process. IBUs must also respect exposure thresholds set by their home regulator, conduct periodic audits at intervals of no more than six months, and notify the Department of Banking Supervision within 15 working days of granting such loans. These measures are intended to maintain transparency, prevent misuse, and ensure responsible credit practices.

The second major modification relates to credit extended to companies for buying back their own securities. Previously, restrictions existed to prevent possible market manipulation or misuse of borrowed funds. Under the proposed change, IBUs may now provide loans for buy-backs as long as such activity is legally permitted in the jurisdiction where the borrowing company is incorporated. This flexibility is expected to facilitate corporate restructuring and capital management activities, while still safeguarding regulatory compliance.

Stakeholders, institutions, and members of the public are invited to submit comments, suggestions, and proposed modifications by November 7, 2025, following the prescribed format in MS Word or Excel. Submissions are to be emailed to the designated IFSCA officials. The amendments, once finalised, will be incorporated into the Banking Handbook, and the circular's directions will take effect immediately.

This consultation reflects IFSCA's broader efforts to modernise regulatory rules, harmonise them with international frameworks, and support responsible credit practices within GIFT IFSC's growing banking ecosystem. Click here

• Consultation Paper on Amendments to IFSCA (Fund Management) Regulations, 2025

The International Financial Services Centres Authority (IFSCA) has published a Public Consultation Paper proposing a regulatory framework that would require the dematerialisation of securities issued and listed by companies within the International Financial Services Centre (IFSC) - specifically in GIFT City. This proposal is consistent with IFSCA's larger aims at improving investor protection, modernising infrastructure related to securities, and complying with international practices generally used and accepted around the world. Additionally, the proposal allows for the elimination of risks associated with physical securities, including loss, theft, forgery, damage, duplication, and slow transfers.

Under the proposal, new issuances of securities including equity shares, preference shares, debentures and others would only be permitted to exist as electronic or dematerialised forms. For issuers who already have securities in physical form, a phased approach will be adopted. The phased approach is an attempt to allow companies ample time to then coordinate with depositories, refresh their record, and to notify security holders. To formalise this proposal, amendments will be made to various regulations, including the IFSCA (Issuance and Listing of Securities) Regulations, IFSCA (IFSC Companies) Regulations, and IFSCA (Depositories) Regulations.

The proposal also specifies the duties of issuers, depositories, and intermediaries. Issuers must convert all outstanding physical securities to dematerialised securities within the specified time frame and maintain electronic records that reflect ownership. Depositories must hold securities data securely, facilitate transfers, and perform ongoing reconciliations. Intermediaries such as registrars and share transfer agents must also ensure that they update their systems to only accommodate dematerialised instruments going forward.

The consultation paper also indicates some advantage for market participants. Dematerialisation improves the efficiency of corporate actions like dividends, bonus issues, rights issues, and mergers since these actions would no longer require manual processing to work effectively. Additional advantages include improved market transparency and faster settlement cycles, as well as allowing for surveillance to happen effectively as beneficial ownership is monitored in real time. For investors, dematerialised and electronic holdings offer greater safety, less burden on administration, and increased ease of portfolio management.

All stakeholders, including issuers, depositories, market intermediaries, investors, clearing corporations, and industry bodies, are encouraged to provide feedback to the responses section of the structured questionnaire. Feedback must be provided by the deadline indicated to the appropriate IFSCA officials. The Authority hopes to finalise the framework once industry responses have been received and evaluated and the impact taken into consideration.

With this proposal, IFSCA takes a decisive step toward digitising securities lifecycle management in IFSC, mitigating risks associated with physical documentation, boosting investor confidence, and aligning GIFT IFSC's regulatory environment with mature international financial centres. Click here

• Consultation paper on Regulatory Framework for differential distribution in Restricted Schemes and Venture Capital Schemes to facilitate blended finance and other fund structures

The International Financial Services Centres Authority (IFSCA), on 29th November 2022, published a Public Consultation Paper that aims to establish a framework which will allow Venture Capital Schemes and Restricted Schemes in GIFT IFSC to issue different classes of units subject to different distribution rights. The development seeks to create blended finance whereby concessional or philanthropic capital incurs the higher risk in the hope of attracting private investment for climate-aligned and developmental projects. The impetus for the proposal arises from the many requests from the industry and the recommendations from IFSCA's Expert Committee on Sustainable Finance who stated that India requires a tremendous amount of capital to meet its sustainability objectives, pegged as 10 trillion USD to achieve its net-zero commitments by 2070.

In the proposed structure Schemes can designate classes of units as Senior and Junior (subordinate) units whereby Junior tranches would bear the additional loss or inflated returns. The ESG Schemes may also accept up to 20% of their corpus in the form of grant. To protect investors, the framework would therefore require the Placement Memorandums to provide significant disclosures on the risks, in addition to independent valuation on each class of units, a minimum subscription amount of USD 2 million (the amount would reduce to USD 1 million for accredited investors); and a diversification limit that would restrict exposure to a maximum of 25% in any single investee company; additionally, the fund would need to ensure that the capital invested is not used by the investee company to repay outstanding obligations owed to the fund investors to mitigate any loan ever-greening risks.

IFSCA believes that permitting differential distribution will broaden investor participation, enable better risk-sharing, and align GIFT IFSC with global fund structuring standards. Stakeholders have been invited to submit comments in the prescribed format by November 11, 2025. Click here

• Regulatory Framework for Dematerialisation of securities by entities in the IFSC jurisdiction

The IFSCA has issued a Public Consultation Paper to mandate the dematerialisation of all securities issued by entities having their registered office or place of business in GIFT IFSC. The proposal aims to improve the custody and settlement of securities; provide uniform regulatory structure; and increase the level of investor protection. Many IFSC-registered entities, on the other hand, continue to request International Securities Identification Numbers (ISINs) and hold their securities in domestic depositories in India, which hampers regulation, can cause delays in a transaction, and results in administrative burden. The current draft circular proposes issuers will only be responsible for obtaining ISINs from a depository that is registered with the IFSCA or has been approved by it.

The draft circular outlines a transitional roadmap that requires entities to migrate their existing dematerialised securities from a domestic depository to an IFSC registered depository by 31 March 2026. Issuers will be expected to develop a smooth transition pathway for their investors with appropriate support such as information on the transfer, account establishment, and timelines. The IFSC registered depository, once the transition has been finalised, is be responsible to send a report of compliance to the IFSCA by 30 April 2026. Notably, issuers are still allowed to use ICSDs for overseas listing and trading in accordance with the IFSCA (Listing) Regulations, 2024.

Public comments have been invited until November 16, 2025, to be submitted in a structured format specifying suggested changes and rationale. Once finalised, the framework is expected to simplify record-keeping, reduce settlement risk, and align GIFT IFSC with global best practices for digital securities infrastructure. Click here

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