The International Financial Services Centers Authority (IFSCA) is changing the regulations for broker dealers working in IFSCs like GIFT City in an effort to strengthen India’s standing in the world of finance.
The goal? To enable seamless access to international markets and foster cross-border capital flows.
1.A brief retrospection
The journey began with the 2021 Capital Market Intermediaries Regulations, which first allowed broker dealers to connect with global exchanges. This was refined through circulars in 2021 and 2024, enabling proprietary trading via direct memberships or cross-border arrangements.
2. Where we stand today?
The 2025 Regulations retain global access provisions under transitional rules, ensuring continuity while IFSCA finalizes a new framework. Broker dealers can still operate under the 2021 norms, but change is on the horizon.
3.What’s in the Consultation Paper?
Released in May 2025, the paper proposes:
- Widening the scope of eligible entities:
- GAPs can onboard clients to access the foreign markets. Clients can either be person resident in India or a person resident outside India to the extent permitted under FEMA.
- No requirement of taking a no objection certificate from the recognised stock exchanges in the IFSC to access the global markets.
- Emphasis on best-in-class infrastructure, benchmark regulatory standards, and robust supervision.
- Broker dealers must adhere to CMI Regulations, including client protection, risk management, and reporting norms.
4.Why it matters?
This initiative positions IFSC as a regulated, globally connected hub for securities trading. It opens doors for portfolio diversification, hedging, and arbitrage - benefiting both Indian and international investors.
Authors:
Smrithi Nair
Partner, Juris Corp
Email: [email protected]
Mahak Saboo
Principal Associate, Juris Corp
Email: [email protected]