Public comments on proposed amendments to the IFSCA (Capital Market Intermediaries) Regulations, 2025

Public comments on proposed amendments to the IFSCA (Capital Market Intermediaries) Regulations, 2025 S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 1. Regulation "A professional qualification or post-graduate degree or To be modified as Please clarify who is/ qualifies as 9(2)(a) post graduate diploma (minimum one year in duration) considered fit by the a ‘recognised foreign university’ in in finance, law, accountancy, business management, Authority. the said context. commerce, economics, capital market, banking, insurance, or actuarial science, fintech, science, technology, engineering or mathematics from a university or an institution recognised by the Central Government or any State Government or a recognised foreign university or institution or association or a CFA or a FRM from Global Association of Risk Professionals or any other relevant educational qualifications as may be specified by the Authority" 2. Regulation "Provided that a graduation degree in any field from a Add qualitative The reduction to 5 years 9(2)(a) university or an institution recognised by the Central requirements as addresses a genuine operational Proviso Government or any State Government or a foreign follows: challenge and enhances IFSC's university would suffice where the principal officer or competitiveness. However, 5 years the compliance officer has a work experience of at least "Provided further that may be insufficient for complex five years in the financial services market" in such case the financial/ capital market principal officer or intermediary functions unless the compliance officer as experience is directly relevant. applicable shall have The suggested qualitative work experience of at requirement ensures that officersS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications least three years, and possess at least some substantive two years respectively expertise in relevant areas to in roles directly related enhance governance and to finance, compliance, assurance function of the risk management, intermediaries and investors regulatory affairs, or confidence while dealing with capital markets such IFSC intermediaries . operations." 3. Regulation "(8) Where an entity has multiple registrations under (a) Define "adequate (a) An objective scale to 9(8) these regulations, the principal officer shall be experience" for determine adequacy of appointed/designated for each such registration vertical head: experience will be helpful and separately: Provided that an entity with registration as "The vertical head provide more certainty and broker dealer, clearing member, and depository for distribution clarity from compliance participant, custodian and registered distributor may activities shall have perspective. have the same person as principal officer for these at least three years (b) However, combining activities: Provided further that an entity having multiple of experience in distribution with execution registrations under the above proviso shall have a distribution, creates inherent conflicts – separate official with adequate experience in the advisory, or wealth distributors recommend financial services market as a vertical head for its management distribution business activities" products while broker dealers functions, and shall execute transactions. A robust report directly to conflict of interest framework the board or senior management on is essential, including matters relating to information barriers (Chinese walls), independent oversightS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications distribution mechanisms, and client activities." disclosure. This balances operational efficiency with (b) Add conflict of investor protection. Quarterly interest reporting on conflicts framework identified and mitigation requirement: measures would provide "Provided further regulatory oversight. that entities availing of common principal officer arrangements shall maintain a comprehensive written conflicts of interest policy, establish information barriers between distribution and execution functions, and provide annual certifications to the Authority regarding conflict management."S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 4. Regulation "Provided that where an entity is a broker dealer, Please clarify the Clarify will be helpful from a 3(1)(cc) clearing member or investment banker, the 'net worth' following through a practical and compliance Explanation shall mean the aggregate value of its liquid assets: detailed circular: perspective. Explanation: Liquid assets for the purpose of this clause shall mean cash and bank balance, fixed deposits, (a) Margin Types: Government Securities and other instruments as may be Treatment of initial specified by the Authority" margins vs. variation margins; cash margins vs. non-cash collateral; excess margins. (b) Valuation: Whether government securities should be valued at cost or market value; applicable haircuts.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications (c) Other Deposits: Treatment of security deposits; deposits with third-party clearing members; deposits in foreign jurisdictions (d) Timing: Whether liquid assets should be computed daily, monthly, or quarterly. (e) Comprehensive List: Specify "other instruments" that qualify as liquid assets. (f) Reporting Templates: ProvideS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications standardized templates for net worth computation. 5. New "Minimum net worth requirement of USD 1 million may (a) Earmarking Clarity will be helpful from Regulation - be specified for custodians registered with IFSCA. In the Mechanism: operational and compliance Custodian case of a branch, the net worth may be maintained at the Specify what perspective. Net Worth parent entity level, with the specified amount duly constitutes valid earmarked for its branch in the IFSC" "earmarking" - - Proposal 5 whether a board resolution is sufficient or if specific segregated accounts are required. (b) Verification: Clarify how IFSCA will verify that parent entities have earmarked funds. (c) Currency Conversion: Specify howS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications conversion should be handled if parent entity net worth is in a different currency. (d) Ongoing Compliance: Specify monitoring frequency (monthly/quarterl y/annually) and cure period if earmarked net worth falls below USD 1 million. 6. New "IFSCA is exploring the introduction of an Umbrella Need the following For consideration by the Framework Registration (unified registration) framework for Capital classifications: Authority. - Proposal 6: Market Intermediaries, which would enable an entity to (a) Structure: Umbrella seek registration for undertaking multiple activities (i) Adopt modular Registration through a single application form" approach allowing entities to add/remove activities without re- registration.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications (ii) Design single application form with activity-specific annexures. (iii) Provide fast- track process for existing entities with multiple registrations (b) Mandatory Safeguards: (i) Organizational: Information barriers (Chinese walls); separate reporting lines; physical separation where feasible; system segregation. (ii) Governance: Minimum independent directors; board-level conflicts committee; enhanced compliance functionS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications with direct board reporting; mandatory internal audit. (iii) Disclosure: Client disclosure of all activities and potential conflicts; transaction- level disclosure; annual public disclosure of conflict management framework. (iv) Regulatory: Enhanced supervision with more frequent inspections; quarterly conflict reporting; clear breach consequences including activity suspension. (v) Clarity on the following points:S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications (A) conflict of interest; (B) principal officer and compliance officer requirement across all the activities (C) any other minimum staffing and experience/ qualification requirement (D) any specific policy or SOP requirement. 7. Regulation At present, the proposed We appreciate the ease We humbly recommend 9(8) of the amendment to the regulation is as of compliance with the same given that overlapping CMI follows: respect to responsibilities can lead to risk of Regulations “Where an entity has appointment of lack of segregation in sensitive multiple registrations multiple principal functions like under these officers. We humbly distribution, advisory regulations, the recommend that and compliance. Annual audits principal officer shall annual compliance will ensure conflict checks and be appointed/ audits of such that there is no designated for each principal officers information leakage. such registration should be mandated separately: Provided for theS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications that an entity with same. registration as broker dealer, clearing member, and depository participant, custodian and registered distributor may have the same person as principal officer for these activities: Provided further that an entity having multiple registrations under the above proviso shall have a separate official with adequate experience in the financial services market as a vertical head for its distribution business activities:” 8. Regulation The current We humbly suggest We humbly request 3(1)(cc) definition under the introducing a clear considering including aS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications extant CMI definition of liquid definition for liquid Regulations is assets as assets and making it "net worth" means unencumbered inclusive to include the aggregate value assets that are margins to ensure there of the paid-up share readily available for is clarity as regards the capital (or capital meeting obligations kinds of permissible contribution) and all including margins; assets. If margins are reserves created out subject to included within the of the profits, regulatory haircuts. definition of liquid securities premium assets, they should be account and debit or credit balance of explicitly stated as profit and loss being subject to account, after regulatory valuation deducting the norms and applicable aggregate value of haircuts. the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the balance sheet, but does not include reserves created out of revaluation of assets, write-back ofS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications depreciation and amalgamation: Provided that where an entity is a broker dealer, clearing member or investment banker, the 'net worth’ shall mean the aggregate value of its liquid assets: Explanation: Liquid assets for the purpose of this clause shall mean cash and bank balance, fixed deposits, Government Securities and other instruments as may be specified by the Authority; 9. 5 An entity desirous of We appreciate the We suggest the same obtaining a permission for a to ensure ease of doing certificate of single umbrella business and registration as a CMI registration to ease regulatory efficiency forS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications in IFSC shall submit compliance entities with multiple an application form burdens, we humbly registrations. through SWIT along suggest providing a with documents and single-window application fees, in portal for, the manner as application specified by the submission, Authority: ongoing compliance Provided that the filings and renewal applicant seeking and reporting. We registration to act as also suggest a broker dealer, including activity clearing member, specific capital depository participant shall adequacy make the application requirement along along with such with the umbrella additional license. information through the recognised stock exchange, recognised clearing corporation, recognised depository, as the case may be.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 10. Regulation 9 requirements for qualification and experience of Professional fintech, science, technology, principal officer and compliance officer of capital market qualification, post engineering, and mathematics intermediaries in the IFSC graduate degree or (STEM) law, or accountancy or post graduate diploma financial planning are relevant (min one year) in qualifications from business or fintech, science, compliance perspective. technology, engineering, and mathematics (STEM), may also be added as valid qualification to act as principal officer or compliance officer of a capital market intermediary. 11. Regulation 9 requirements for qualification and experience of The minimum number There are Practical difficulties (2) (a) of the principal officer and compliance officer of capital market of years of experience faced to comply to find 10 years’ CMI intermediaries in the IFSC for a graduate to act as experience requirement, Regulations, principal officer / considering that there is a dearth 2025 compliance officer of a of skilled professionals in GIFT capital market city, hence 5 (five)year of intermediary may be experience seems to be reduced from 10 years appropriate. to 5 years.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 12. regulation 9 Where an entity has multiple registrations under these Where an entity has Considering the activities of (8) of the regulations, the principal officer shall be appointed/ multiple registrations broking, DP, custodian, CMI designated for each such registration separately. under these complement each other and Regulations, regulations, the enable the same entity to offer 2025 principal officer shall multiple opportunities for its be appointed/ clients, it is only prudent that one designated for each principal officer is best suited, such registration additional the same can be separately: extended to Investment adviser Provided that an entity and research analyst license as with registration as broker dealer, clearing well , as these are all fiduciaries member, and however as distribution forms a depository part of sales, the vertical head for participant, custodian this can be separate one. and registered distributor may have the same person as principal officer for these activities: Provided further that an entity having multiple registrations under the above proviso shall have a separate official withS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications adequate experience in the financial services market as a vertical head for its distribution business activities:” 13. regulation 3 Net worth a) Base minimum No Comment (1) (cc) of capital and interest the CMI free deposit deposited Regulations by the broker dealers and clearing members with Stock Exchanges and Clearing Corporations shall not be considered part of liquid assets. b) Margins deposited with clearing member and clearing corporation by broker dealer and clearing member respectively, shall be considered as part of liquid assets. 14. IFSCA had specifying the minimum net worth requirements related proposed that the No Comment issued a to registration/recognition of custodians in the IFSC. minimum net worthS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications circular in requirement of USD 1 February million may be 2021 specified for custodians registered with IFSCA. In the case of a branch, the net worth may be maintained at the parent entity level, with the specified amount duly earmarked for its branch in the IFSC, in accordance with Regulation 7(2) of the CMI Regulations. Existing custodians that are required to infuse or earmark additional funds may be provided time till January 31, 2026 to comply with the revised net worth criteria.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 15. Introduction IFSCA is exploring the introduction of an Umbrella IFSCA is exploring the Aim is to enhance ease of doing of an Registration (unified registration) framework for Capital introduction of an Business for capital market Umbrella Market Intermediaries Umbrella Registration intermediaries in the IFSC. Registration (unified registration) Unified registration will be highly (unified framework for Capital beneficial for entities as business registration) Market proposition can be leveraged framework Intermediaries, which across various licenses and cater for Capital would enable an entity to clients without the hassle of Market to seek registration for going through separate Intermediari undertaking multiple registrations which typically seek es. activities through a single application common information, only the form. This initiative delta related to the relevant will enhance ease of license can be furnished doing business and additionally. streamline the overall Additionally, the compliances registration process related to different licenses can also be clubbed on the same portal 16. Representat A professional A) As provided in the ion 1 qualification or post- representation itself, IFSCA is at graduate degree or its very nascent stage. At this A. In the post graduate diploma stage, any financial ecosystem extant (minimum one year in requires experienced officers in regulations, duration) in finance, order to flourish in near future. a graduate law, accountancy, The representation undervalues degree has business management, the IFSC’s ability to attractS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications been commerce, economics, qualified talent and incorrectly permitted capital market, frames the ten-year graduation- with ten banking, insurance, or plus experience requirement as years of actuarial science, or in impractical. We strongly believe experience in fintech, science, that the experience requirement the financial technology, must not be reduced from 10 sector. From engineering or years to 5 years as it can hamper the mathematics (STEM) the efficiency of the market discussions where the capital intermediaries. Rather than with market market intermediary is lowering thresholds, regulators participants, engaged in activities should support capability it has been substantively linked to building and temporary observed these domains from a provisional approvals with strict that university or an oversight to preserve market considering institution recognised integrity. This maintains high the nascent by the Central standards while enabling stage of Government or any commercial pragmatism. capital State Government or a markets recognised foreign B) The legislative intent of ecosystems in university or keeping educational qualification the IFSC, the institution or in finance, law, accountancy, entities are association or a CFA or business management, commerce, finding it a FRM from Global economics, capital market, difficult to Association of Risk banking, insurance or actuarial identify Professionals or any science is to recruit officers who personnel other relevant are capable of understanding theS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications with ten educational nuances and intricacies of a newly years of qualifications as may developed financial market. The experience. be specified by the roles of Principal Officer and Authority. Compliance Officer are B. The fundamentally financial- market regulatory roles requiring deep participants understanding of capital markets, have also law, compliance frameworks, and expressed risk management. STEM and that in case fintech degrees, while valuable, do of post not by themselves equip a person graduate with the regulatory, fiduciary, and degree, post market-conduct knowledge these graduate positions demand. degree in However, STEM and fintech disciplines qualifications should be such as recognised for Principal Officer Science, and Compliance Officer roles Technology, where the intermediary’s core Engineering, business inherently depends on and those skills. For example- certain Mathematics firms like algo trading platform, (STEM), crypto platforms, fintech Fintech may intermediaries inherently require also be senior-level management to considered a possess knowledge aboutS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications valid complex systems, data qualification architectures, AI/ML models, for the roles cybersecurity, and technology- of principal driven risk. In such officer and intermediaries, STEM or fintech compliance qualification can bring domain officer. The expertise for risk oversight. regulations Therefore, we suggest that STEM notified by based qualifications shall be IFSCA also extended on sector-specific permit intermediaries rather than being foreign universally applicable. universities (Internation al Branch Campus and Offshore Education Centre) to offer courses in subject areas such as fintech, science, technology, engineeringS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications and mathematics . 17. Representat Custodians and The fundamental difference in the ion 2 distributors must not roles and responsibilities of be allowed to operate custodians and distributors and IFSCA is in with the common broker dealers, clearing members receipt of principal officer with and depository participants stems representatio the other categories. from the notion that the ns from Custodians and Distributors have market a greater responsibility of participants investor protection compared to to permit the other set (Read definition of other custodian in SEBI (Custodian of categories Securities) (Amendment) (mainly Regulations, 2008). The existing custodian carve-out for broker dealers, and clearing members, and depository distributors) participants is justified because to also these functions are tightly operate with integrated within the trade common execution/ clearing–settlement principal chain and share common market- officer as infrastructure controls and currently functions. In contrast, custody andS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications provided for distribution involve distinct broker fiduciary responsibilities, client- dealers, asset safeguards, product- clearing governance requirements, and members and AML/KYC exposures. Allowing a depository single Principal Officer across participants. such diverse functions risks There are oversight gaps and weakens banks in IFSC control environments, that have undermining supervisory clarity taken and increasing systemic and multiple conduct-risk vulnerabilities. registrations with IFSCA for capital market intermediari es such as broker dealers, clearing members, depository participants, distributors,S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications and custodians. 18. Representat Recognise margins as Treating base minimum capital or ion 3, Para liquid assets only interest-free deposits as liquid 25 when the intermediary assets not supported because proves immediate these amounts are regulatory Specifically, access and control, cushions and are not immediately the exclude base minimum available to meet an participants capital and interest- intermediary’s obligations. have free deposits, and Margins can be counted only requested allow security deposits when the intermediary can show guidance on or similar balances to that the balance is under its whether count only when they control and can be accessed components are unrestricted, without legal or contractual such as base available on demand restrictions; margins held by a minimum and disclosed with clearing house, client-segregated capital, appropriate haircuts in amounts or balances that cannot security the net-worth be withdrawn on demand must be deposits, computation. excluded. Security deposits and interest-free similar amounts should also be deposits, and included only when the various intermediary demonstrates margins immediate availability under the maintained governing contract, with with stock conservative haircuts and clear exchanges disclosure in the net-worthS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications and clearing schedule. This approach protects corporations the purpose of a liquid net-worth may be requirement while allowing considered as genuinely usable resources to liquid assets count and reflects how prudential for the regimes handle liquidity in purpose of comparable market net worth infrastructures. computation. 19. Proposal 1 Introduce a role- While the proposal widens the & 2 specific fit & proper pool of eligible candidates, the framework applicable regulations remain silent on the fit Expanded to Principal Officers & proper criteria specific to educational and Compliance Principal Officer and Compliance qualification Officers, including Officer roles. In most jurisdictions s and mandatory disclosure (MAS, FCA, FSRA), these roles are reduced of past regulatory subject to heightened standards experience actions or internal relating to integrity, past criteria for disciplinary records, regulatory breaches, financial Principal conflict-of-interest soundness, and conflict-free Officers and declaration, and functioning. Compliance annual disclosures. In the absence of an explicit fit & Officers. This ensures the proper framework, lowering expansion of eligibility experience barriers may inadvertently allow individualsS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications does not dilute with prior compliance lapses, governance standards. unresolved enforcement actions, or weak governance history to take on senior control functions, which undermines the credibility of IFSC’s supervisory regime. 20. Proposal 2 Thus, the suggested The proposal to reduce the addition is as follows- minimum experience (Reduction of Graduates with 5 requirement for graduates from Minimum years’ experience may 10 years to 5 years is welcome and Experience be appointed as aligned with the talent realities of Requirement Principal Officer / IFSC. However, it is suggested that ) Compliance Officer the revised threshold be coupled subject to completion with a mandatory completion of a of an IFSCA-approved regulatory-grade certification to certification on ensure competency uniformity governance, across Principal Officers and compliance and Compliance Officers. securities laws within The rationale behind this 12 months of suggested change is that the The appointment. Non- reduction in years of experience is completion within the necessary because the IFSC stipulated timeline capital-markets ecosystem is still shall render the developing and does not yet have appointment non- access to a deep domestic talentS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications compliant. p o o l w i t h 1 0 + y e a r s ’ e x p e r i e n c e , And the expected as highlighted in the consultation positive outcome is paper. that this addition will However, reducing the experience preserve the intended threshold without a parallel benefit of lowering competency measure may lead to barriers to talent heterogeneity in regulatory entry, while ensuring capability, particularly among that compliance individuals coming from leadership in IFSC operational rather than meets a uniform governance backgrounds. threshold of technical A balanced solution adopted by proficiency, global regulators (e.g., FINRA supporting long-term Series 24 in the US, DFSA Officer- credibility of the IFSC in-Charge competency ecosystem. requirements in DIFC) is to permit lower seniority subject to structured qualification / examination. Such certification does not negate ease of doing business rather, it strengthens governance quality even with younger compliance talent. This also helps foreign intermediaries performing global shared functions out of GIFT IFSC,S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications as they can train and deploy employees rather than search for rare 10-year talent. 21. Proposal 4, Only the free balance A) The margin money deposited Para 26(b) that is, the excess with the Clearing Corporation margin available over (CC) is not freely usable capital it A. The IFSCA and above the required is pledged solely to cover the proposes that margin should be firm’s open positions and its margins treated as a liquid potential future exposure arising deposited asset for Net Worth from market volatility. In the with Clearing purposes, because it event of a sharp market Corporations represents capital that movement or a participant (CC) by the intermediary can default, this margin is the first line Clearing actually use to meet of defence for the CC and is Members operational needs or immediately invoked to absorb should be absorb shocks. In trading losses. considered contrast, the required If the same blocked margin is part of or blocked margin simultaneously counted toward a "Liquid should be fully firm’s regulatory Net Worth, the Assets" for deducted, as it is firm ends up appearing healthier calculating already pledged for on paper than it actually is. Net Worth. covering trading Economically, the firm would have This proposal exposure and cannot no real buffer at the exact moment contradicts simultaneously serve it needs one. All of its supposed the as a solvency buffer. capital strength would already beS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications fundamental This adjustment would encumbered and unavailable for principle of ensure that Net Worth meeting ordinary business "Liquid Net reflects truly available obligations. Worth," financial resources This creates a distorted picture of which is rather than solvency. A trading member could intended to encumbered funds technically satisfy Net Worth measure that create a requirements while having no unencumber misleading free, unencumbered liquidity to ed solvency appearance of pay operational creditors, service capital. liquidity. vendors, or even meet payroll. The regulation would then allow a Suggested Wording for scenario where a firm looks providing clarification compliant but is one market shock - a w a y f r o m f i n a n c i a l s t r e s s “For the purpose of because its “Net Worth” is determining liquid net effectively locked up as margin worth, margins capital that cannot be deployed deposited with for any purpose other than risk clearing corporations coverage by the CC. shall be considered In short, treating pledged or after adjusting blocked margin as liquid capital applicable regulatory undermines the very objective of haircuts. Excess Net Worth norms: ensuring that margin, whether in intermediaries maintain cash or approved independent, loss-absorbing securities, shall beS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications eligible subject to the financial capacity beyond the same valuation margins required for methodology.” t h e i r t r a d i n g a c t i v i t i e s . This small clarification materially improves B) The clarification that base capital-planning minimum capital (BMC) and certainty, audit interest-free deposits will not consistency, and qualify as liquid assets, while supervisory margins deposited with clearing predictability, without corporations will qualify is altering the risk- appreciated. sensitivity or However, it is suggested that the prudential intent of amendment should additionally the proposal. specify (i) the treatment of excess margin and (ii) haircut applicability on non-cash margins to avoid interpretational inconsistencies. The rationale behind this proposition is that excluding BMC and interest-free deposits aligns with risk-coverage objectives, but the paper is silent on whether “excess margin” beyond regulatory requirement would continue to qualify as liquid asset.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications Similarly, equally, clearing corporations accept non-cash margin collateral (e.g., G-secs, sovereign securities, approved corporate bonds). Without clarity on haircut methodology, entities will not have predictability in capital planning under liquid-net- worth requirements. Additionally such an ambiguity may lead to divergent practices between market participants and auditors, and increase post-inspection disputes. A rule-based treatment of margin components (similar to SEBI and ESMA frameworks) would promote transparent and consistent computation across intermediaries. 22. Proposal 5 While the reduction to SEBI has recently increased the USD 1 million is custodian net worth to INR 75 Custodian welcomed, there Crore. Custodians hold client Net Worth should be a mandated assets worth potentially billions. A (USD 1 Professional capital base of only USD 1 Million Million) Indemnity Insurance is extremely thin to absorbS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications (Support the (PII) commensurate operational shocks (fraud, cyber- proposal) with Assets under attacks, theft of assets). Further, custody (AUC). To the low barrier may attract non- maintain the "Ease of serious or under-capitalized Doing Business" (low players solely looking to bypass entry barrier) without stricter SEBI norms, potentially compromising endangering the reputation of "Investor Protection," GIFT City if a failure occurs. A IFSCA should mandate single operational failure (e.g., a Risk Transfer via cyber-transfer hack of $2M or a insurance. This allows botched corporate action the custodian to settlement) would immediately remain "asset light" render the custodian insolvent, while being "coverage leaving clients with no recourse. heavy." Capital of $1M is essentially The objection should "startup cost" money, not "risk explicitly recommend absorption" money.Therefore, the that IFSCA adds a IFSCA's proposal of USD 1 million proviso to Regulation is significantly lower. To balance 7(2) requiring PII with this arbitrage with investor the following protection, a mandatory characteristics: insurance layer in the form of A. Coverage Quantum Professional Indemnity Insurance (The "Scaling" Factor): (PII) is a prudent safeguard The insurance cover against operational risks. must not be a fixedS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications amount but proportional to Assets Under Custody (AUC). B. The policy must explicitly cover professional negligence, fidelity, crime, electronic and computer crime and loss of documents and assets. C. Mandating PII acts as a secondary regulatory filter - To obtain a PII policy, a custodian must undergo due diligence by the Insurance Company. Insurers will assess the custodian’s IT security, internal controls, and staff quality before issuing a policy.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 23. Proposal 6, Support the Umbrella registration cannot be Para 34 introduction of an introduced without ironclad umbrella registration safeguards. A single application Based on the only if IFSCA preserves may simplify paperwork, but the above, IFSCA separate fit-and- IFSC is still building its market and is exploring proper assessments, registration is one of the clearest the controlled-function moments to test an applicant’s introduction checks and on-shore readiness for specific activities. of an supervisory Custody, clearing, settlement and Umbrella requirements for high- distribution carry different risks Registration risk activities, and and conflicts, and international (unified limits the unified peers keep activity-level controls registration) process to even when they offer unified framework administrative licenses. If IFSCA folds for Capital convenience without registration into a single form Market reducing the scrutiny without preserving separate fit- Intermediari applied to custody, and-proper checks, controlled es, which clearing, settlement or functions and on-shore would enable distribution. supervisory requirements for an entity to high-risk activities, it will blur seek oversight and increase the chance registration that firms expand into critical for operations before they are ready. undertaking Streamline processes by all multiple means, but only if the umbrella activities model explicitly keeps strict entryS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications through a gates for activities that touch single client assets or market application infrastructure. form. This initiative will enhance ease of doing business and streamline the overall registration process. 24. Section A Introduce explicit The proposed amendments do not (Eligibility transitional relief, such clarify how existing Principal criteria) as, allowing existing Officers and Compliance Officers officers to continue for will be treated in the transition Specifically, a defined period (e.g., period. Sudden application of new the part 18–24 months); qualification standards may force dealing with permitting relaxation intermediaries to replace the timeline for intermediaries that experienced officers even if they for demonstrate ongoing are competent and performing compliance training and effectively. with supervision; allowing This can result in disruption of qualification conditional approval supervisory continuity, and with periodic operational instability, and experience temporary non-compliance ifS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications requirements reporting during replacements cannot be found . transition. promptly in the limited IFSC talent This preserves market. No Guidance regulatory stability on while implementing Transitional the revised norms. Relief for Existing Officers 25. 26 (b) Margins deposited Suggested 1. Alignment with the Two-Net Definition with clearing Modification: In Worth Framework: IFSC of Net Worth member and clearing addition to margins brokerdealers are mandated to under CMI corporation by deposited with maintain Regulations broker dealer and clearing member / separate net worth for (i) IFSC (Liquid clearing member clearing operations and (ii) global Asset respectively, shall be corporation, the operations. Definition – considered as part of following For enabling global market Proposed liquid assets. should also be access, Amendment considered as liquid margins are compulsorily parked ) assets: “Margins / with international brokers / GAPs. collateral deposited If with International these margins are not recognised Brokers or Global as Access Providers liquid assets, firms will be forced (GAP) by IFSC toS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications broker dealers for allocate disproportionate execution of additional trades on capital for the same risk, defeating international the intent of the two-net-worth exchanges.” framework. 2. Regulatory Consistency & Principle of Parity: IFSCA has rightly recognised margins with clearing members / clearing corporations as “liquid assets”. Margins with international brokers / GAPs serve the same functional purpose— they are regulatory collateral mandated to support trading exposure and therefore have equivalent liquidity and risk characteristics. Exclusion creates an unintended regulatory disparity between domestic and global brokerage activity within IFSC.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 3. Nature of Margins – High Quality and Ring-Fenced: Margins placed with international brokers / GAPs are typically held in permitted forms such as cash, treasury instruments or highly liquid marketable securities, and are ring-fenced. These balances are fully accessible, marked-to-market daily and withdrawable when positions are settled/closed, thereby satisfying liquidity criteria. Conclusion: Including margins placed with international brokers / GAPs is consistent, risk-neutral and will meaningfully support the growth of IFSC’s global market ecosystem. 26. Regulation 9 Accordingly, regulation 9 (2) (a) of the CMI It is suggested that, in Many candidates in the IFSC (2) (a) Regulations, 2025 is proposed to be amended as addition to the ecosystem possess strongS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications under: disciplines already analytical and quantitative A professional qualification or post-graduate degree specified- namely capabilities; however, they or post graduate diploma (minimum one year in finance, law, may not hold a postgraduate duration) in finance, law, accountancy, business accountancy, business degree in the prescribed management, commerce, economics, capital management, disciplines. In such cases, market, banking, insurance, or actuarial science, commerce, economics, certifications issued by a fintech, science, technology, engineering or capital markets, recognised body, university, or mathematics from a university or an institution banking, insurance, regulatory authority - such as recognised by the Central Government or any State actuarial science, NISM or equivalent capital- Government or a recognised foreign university or fintech, science, market institution or association or a CFA or a FRM from technology, certifications- should be Global Association of Risk Professionals or any other engineering, and accepted as a full alternate relevant educational qualifications as may be mathematics- the route to eligibility, and not specified by the Authority. regulations may also merely as an add-on. expressly recognise market– specific certifications issued by a recognised university, institute, or regulatory body, such as NISM or equivalent certifications, as valid qualifications.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications Furthermore, candidates possessing a graduation degree in any discipline, coupled with a relevant capital- market certification, may also be treated as eligible, even in cases where their academic degree does not fall within the prescribed subjects. 27. Regulation 3 a) Base minimum capital and interest free deposit a) It is requested that BMC/security deposits serve the (1) (cc) deposited by the broker dealers and clearing Base Minimum same risk management purpose members with Stock Exchanges and Clearing Capital (BMC), as the deposits maintained by Corporations shall not be considered part of Security Deposits, and Clearing Corporations under the liquid assets. Interest-Free Deposits Settlement Guarantee maintained with Fund (SGF). Since SGF-linked the Exchange should deposits are recognised be considered as as eligible components for net part of Liquid worth computation due Networth, subject to to their stability, risk-cushioning role, and availability forS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications appropriate settlement obligations, treatment. BMC/security deposits maintained with Stock Exchanges merit similar regulatory treatment. These deposits are kept exclusively for settlement and risk-management purposes and remain fully available to the Exchange; therefore, excluding them from liquid net worth creates an inconsistency and imposes an unnecessary additional capital burden on IFSC intermediaries. 28. Regulation 3 b) Margins deposited with clearing member and Margins deposited Margins deposited with clearing (1) (cc) clearing corporation by broker dealer and with clearing members and clearing clearing member respectively, shall be members corporations represent cash- considered as part of liquid assets. and clearing backed, ring-fenced and corporations by immediately realisable assets broker dealers held strictly for and clearing members settlement and risk-management are rightly purposes. Their considered part of liquidity profile does not differ liquid assets. based on the category ofS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications In addition, margin intermediary. deposits maintained with Global Access Global Access Providers (GAPs) Providers (GAPs) and their affiliates also and maintain margins with clearing their affiliates by members/clearing entities availing global corporations to facilitate client market access services access to global should also be markets. These deposits are recognised as eligible identical in nature, margin, as they purpose, and accessibility to the perform the same risk- margins maintained management and by broker dealers and clearing settlement function. members. Therefore, Accordingly, such extending recognition of such deposits should be margins as eligible liquid assets included within the ensures consistency, parity, and overall margin fairness permitted for liquid across intermediary categories. asset computation. 29. Regulation (8) Where an entity has multiple registrations under Entities registered as The Principal Officer is already 9(8) of the these regulations, the principal officer shall be broker dealers, entrusted with the CMI appointed/ designated for each such registration clearing members, overall regulatory, supervisory, Regulations, separately: depository and governance 2025 participants,S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications Provided that an entity with registration as broker custodians, and responsibility across all dealer, clearing member, and depository participant, distributors should be activities of the intermediary. custodian and registered distributor may have the permitted to operate Maintaining the PO as the ultimate same person as principal officer for these activities: with a common accountable person Provided further that an entity having multiple Principal Officer ensures that regulatory oversight registrations under the above proviso shall have a (PO) without the remains centralised and robust. separate official with adequate experience in the mandatory financial services market as a vertical head for its requirement of A mandatory requirement to distribution business activities. appointing a appoint a vertical head separate vertical exclusively for distribution may head for distribution. result in duplicative Since the PO already roles, increased cost burden, and carries ultimate unnecessary regulatory structural fragmentation, responsibility across particularly for entities where all the scale of distribution activity is activities, creating an limited. additional vertical head role becomes Entities are fully capable of unnecessary. assessing their operational needs and may appoint additional A more efficient personnel or approach is to allow functional heads whenever the the PO business volume or to appoint required regulatory complexity requires personnel based on it.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications the scale and needs of the distribution Allowing entities to structure business, who would their teams based on report directly to the actual business requirements- PO. This ensures while retaining the PO as adequate oversight the final responsible officer- while ensures a balanced avoiding rigid approach that maintains organisational regulatory accountability structures and without mandating rigid unnecessary organisational roles. duplication of roles. 30. General The requirement to Since the branch is nothing but an observation obtain a NOC from extension of the parent company, SEBI, RBI, or any other all the regulations, policies etc. of regulator may be done the parent company are majority away with in cases applied to its branch in IFSC and where the entity is since the parent company is listed being established as a entity the question of non- branch office in IFSC compliance by the branch would and the parent not arise and no violation would company is a listed be done by the branch. In entity. case the regulator wants any more conditions to be attached to the branch setS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications up in IFS, a separate policy guideline can be issued for the same. 31. Regulation “(cc) ‘net worth’ means the aggregate value of the paid- Suggestion: Clarify 1. Nature of Margin Money: 2(cc) – up share capital (or capital contribution) and all reserves whether margin Such margin money is generally Definition of created out of the profits, securities premium account deposits placed with maintained in cash or cash- Net Worth & and debit or credit balance of profit and loss account, foreign brokers or equivalent form, kept in Liquid after deducting the aggregate value of the accumulated global clearing segregated accounts, and readily Assets losses, deferred expenditure and miscellaneous members are included realisable or adjustable against expenditure not written off, as per the balance sheet, but within “liquid assets.” positions—making it akin to does not include reserves created out of revaluation of liquid assets. assets, write-back of depreciation and amalgamation: Additionally, we Provided that where an entity is a broker dealer, clearing request the Authority 2. Supporting IFSC member or investment banker, the ‘net worth’ shall mean to provide a specific Competitiveness: Recognising the aggregate value of its liquid assets: and exhaustive list of foreign margin as liquid assets “other instruments” will enhance operational Explanation: Liquid assets for the purpose of this clause that shall be treated as flexibility, reduce unnecessary shall mean cash and bank balance, fixed deposits, liquid assets, to capital blockage, and bring IFSC Government Securities and other instruments as may be eliminate ambiguity regulations in line with specified by the Authority.” and capital is deployed international market structures— efficiently. supporting the growth and competitiveness of IFSC intermediaries. 3. Risk Management & Transparency: These marginS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications deposits are already subject to daily statements, reconciliations, and audits. Therefore, their inclusion does not increase risk but provides a realistic picture of the firm’s financial capacity. 32. 9 (8) Allow common Principal Officer for broker dealer, Allow common By permitting a common Principal Principal clearing member, depository participant, custodian, and Principal Officer and Officer across closely related Officer for distributor. Vertical Head for activities such as broker dealing, multiple broker dealer, clearing clearing, custody, and distribution registrations member, depository the proposed change: participant, custodian, and distributor under the single same entity. Optimizes Resource Utilization: Many of these functions are interlinked operationally and technologically. A single Principal Officer / Vertical Head can oversee them efficiently. Aligns with Global Practices: Financial centers such as Singapore and DIFC allow multi-S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications activity licenses with consolidated governance, demonstrating that such models can be both efficient and compliant. By permitting a common Principal Officer across closely related activities?such as broker dealing, clearing, custody, and distribution?the proposed change: Optimizes Resource Utilization: Many of these functions are interlinked operationally and technologically. A single Principal Officer / Vertical Head can oversee them efficiently. Aligns with Global Practices: Financial centers such as Singapore and DIFC allow multi- activity licenses with consolidated governance, demonstrating that such models can be both efficient and compliant.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 33. 3(1)(cc) Clarify exclusion of base minimum capital and interest- Liquid net worth shall BMC and interest-free deposits free deposits; include margins with clearing members. include cash, cash are mandated by regulations and Definition of equivalents, and maintained with recognized liquid assets unencumbered exchanges/clearing corporations. for net worth balances such as They represent real financial computation margins with clearing commitment and should be members / Clearing considered part of Net worth. Corporation, Base Minimum Capital, and While these funds are earmarked, interest-free deposits they are readily realizable subject maintained with to settlement obligations. exchanges or clearing Including them provides a true corporations, which picture of financial strength. are readily realizable and not subject to lien or lock-in conditions. 34. New Introduce unified registration for CMIs to undertake Single Principal Officer Ease of Doing Business Proposal multiple activities. & Compliance Officer • Eliminates multiple for all activities, with applications, audits, and Umbrella designated compliance renewals. registration leads or functional • Reduces compliance framework managers for high-risk duplication and or client-facing operational friction. verticals to ensure effective internal Global AlignmentS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications control and • Mirrors international best accountability. practices (e.g., MAS Singapore, DIFC Dubai) where multi-activity licenses exist. 35. Regulation 9 Points 1-4 The enhancement is Align with modern financial of the new not limited to finance, sector needs; IFSCA permits CMI law, capital foreign universities to offer Regulations market, banking, courses in these areas. Appointmen insurance etc. Adding IFSCA is competing directly with t of Principal post-graduate SG, DB, HK and LUX. Officer, degrees in Fintech, These centers do not impose a 10 Compliance STEM (Science, year experience or Officer and Technology, restrict qualification to only other Engineering, traditional finance degrees. human Mathematics) makes it For e.g. MAS (SG) and DFSA (DIFC) resources diverse. focus on 'fit and proper' assessment in place of rigid academic/experience criteria. Potential Risk/Mitigation: Risk: Officers may lack traditional finance knowledge. Mitigation: Mandate minimum training in regulatoryS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications compliance and financial markets basics 36. 9 (2) (a) of (a) A professional qualification or post-graduate degree Reduce to 5 years of Difficult to find personnel with 10 the CMI or post graduate diploma experience from the years experience in nascent IFSC Regulations, (minimum one year in exitsing 10 years is a ecosystem and same rationale as 2025 duration) in finance, law, accountancy, welcome change. Point 1 business management, commerce, Potential Risk/Mitigation: Appointmen economics, capital market, Risk: Insufficient experience may t of Principal banking, insurance or actuarial science from lead to compliance Officer, a university or an institution recognised by failures and governance issues. Compliance the Central Mitigation: Implement Officer and Government or any State Government or a additional supervision for officers other recognised foreign university or institution with 5-7 years human or association or experience; possibly mandatory resources a CFA or a FRM from Global Association of continued relevant Risk Professionals or any other relevant education. Experience educational Requirement qualifications as may be specified by the s Authority: Provided that a graduation degree in any field from a university or an institution recognised by the Central Government or any State Government or a foreign university would suffice where the principal officer or the compliance officer has a workS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications experience of at least ten years in the financial services market 37. Regulation Where an entity has multiple registrations Extend to include This adds huge operational cost 9(8) of the under these regulations, the principal officer custodians and reductions, removes CMI shall be appointed/ registered major barriers to add new Regulations, designated for each such registration distributors; business lines. 2025 separately: distributors must Multiple Provided that an entity with registration as appoint separate Registration broker dealer, clearing member and vertical head is a good s - Common depository participant may cost-saving measure Principal have the same person as principal officer Suggestion: Officer for these activities: - Define "adequate across Provided further that an entity with experience" for multiple registration as credit rating agency and vertical head activities ERDPP may have the same quantitatively (e.g., person as principal officer for these minimum 3-5 years) activities. - Clear Chinese wall and conflict-of- interest policy should be requested. 38. Regulation 3 "net worth" means the aggregate value of This reduces Provides clarity for broker (1) (cc) the paid-up share capital (or capital ambiguity on dealers, clearing members, and contribution) and all components of liquid investment bankers. reserves created out of the profits, assets securities premium account and debit orS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications credit balance of profit and Clarify: Base minimum loss account, after deducting the aggregate capital and interest- value of the accumulated losses, deferred free deposits expenditure and with exchanges NOT miscellaneous expenditure not written off, included; Margins with as per the balance sheet, but does not clearing include reserves created members/corporation out of revaluation of assets, write-back of s ARE included depreciation and amalgamation: Suggestion: Exchange Provided that where an entity is a broker recognised collateral dealer, clearing member or investment can be banker, the 'net worth’ included. shall mean the aggregate value of its liquid assets: Explanation: Liquid assets for the purpose of this clause shall mean cash and bank balance, fixed deposits, Government Securities and other instruments as may be specified by the Authority 39. Regulation 7 Net worth requirements Aligns and is Aligns and is competitive with competitive with global practices (Singapore ~USD global practices 770K, DIFC USD 500K-2M, ADGM (Singapore ~USD 4M, India ~USD 9M). This may encourage entities to expandS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications ~USD 770K, DIFC USD or activate their custody offerings 500K-2M, ADGM ~USD in GIFT. 4M, India ~USD 9M). This may encourage entities to expand or activate their custody offerings in GIFT. 40. Proposal 6 Multiple separate registrations required for A unified registration Strongly recommend fast Umbrella different activities framework allowing implementation of an umbrella Registration multiple license/ registration. activities through A single license with activity add- single application will on would be a big booster for be a game-changer for GIFT vs SG/DB. Modeled on ease of business Singapore's CMS License (>800 institutions hold it); this streamlines process and enhances ease of doing business and faster time to market for new activities. Suggestion: Incentivizes consolidated operations 41. Regulation 9 Reg. 9 (1) - A capital market intermediary shall designate Flexibility of a As per earlier SEBI (1) & 9 (9) a principal officer and a separate compliance officer Compliance Officer to circular, SEBI/HO/MIRSD/DoR/PS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications based out of IFSCA. execute functions /CIR/2022/61 dated 13th May Reg. 9 (9) - Provided further that the Authority may across all Exchanges as 2022 it was required to have a review sub-regulations (8) and (9) based on the size, it was required to have separate subsidiary of the existing scale and a separate subsidiary Stock Broker to be registered complexity of business activities of the intermediaries of the existing Stock under IFSCA. and may specify revised norms in this regard. Broker to be registered Hence, we formulated an entity under IFSCA. Thus, according to it. Whereas as per the common Compliance recent SEBI circular which says, Officer should be registered Stock Brokers to allowed to perform its undertake securities market duties under GIFT related activities in GIFT-IFSC CITY as well under a Separate Business Unit irrespective of its (SBU). based. Also, as per Reg 9 (9): Compliance Officer can be same but it will be reviewed basis on the size, scale and complexity of business activities of the intermediaries and may specify revised norms on it. Hence, we suggest that there should be Flexibility in appointment of Compliance Officer to perform its duties under GIFT CITY as well irrespective of its base location.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 42. Others - Uniformity in the Since every exchange has a existing different different format, we suggest to formats across issue uniformity in the reporting different Exchanges to format For eg. : promote Ease Of Doing 1.Change in Capital Structure and Business. Shareholding 2.Change in Registered Address 3.Change in Designated Director 4.Change in Non-Designated Director 43. Others - Samuhik Prativedan Currently there are multiple Manch for Stock reports required to be submitted Brokers as launched to Exchanges/Depository under by SEBI (As per SEBI IFSCA as given below through Press Release - PR different portal, we suggest to No.43/2025, dated have a dedicated single portal for July 21, 2025), - all these submissions. Suggest to have a dedicated portal to submit/upload all submissions at one place for all exchanges/depositori es under IFSCA for the benefit of all.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 44. Principal Officer / Compliance Officer Risk-based calibration This would encourage high- by type and scale of quality, globally experienced intermediary: We professionals to relocate to GIFT, suggest that the which is consistent with the experience objective of building a global hub. and qualification requirements for PO/CO be calibrated to the risk profile and complexity of the intermediary, instead of a single uniform requirement. For example, Higher requirements for Full- scope broker-dealers, margin lending and international access/ custodians. Proportionately lighter requirement for distribution / advisory / research business Explicit recognition of foreign regulatory andS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications compliance experience: We suggest that experience gained with regulated entities and/or regulators like MAS, FCA, DFSA, FSRA is recognised as relevant experience in financial services markets. 45. Common Principal Officer / Compliance Officer for Document elaborates Multiple Registrations on single PO across entity supported by vertical head, we suggest - Permit a common Compliance Officer for all CMI activities undertaken by the same legal entity, provided that: The entity maintains an appropriatelyS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications staffed compliance team proportionate to nature and scale of activities. There are activity-wise compliance programmes and manuals (broking, custody, clearing, distribution, investment banking, etc.). The COs role description and reporting line to the Board / Audit Committee / Risk Committee are clearly articulated and documented. One senior compliance head is accountable at firm level, supported by segment-level teams.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications Capacity : A single PO/CO may become over-stretched as the business grows, we suggest that: Regulations or a guidance note specify thresholds (e.g. turnover, AUM/AUC, number of clients, number of regulated activities) beyond which IFSCA may require: o A deputy PO/CO, / Additional senior compliance resources / Separation of PO/CO roles across business lines. 46. Net Worth Requirements for Custodians While we support the proposal to simplify the net-worth requirement for custodians to USD 1 million, which canS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications significantly lower the entry barrier for high- quality mid-sized and specialised global custodians to establish a presence in GIFT IFSC. However, we believe a purely flat requirement may not sufficiently reflect the risk profile once the custodian starts handling large volumes of client assets. We suggest AUC linked capital overlay, Parental guarantee where custodian is a branch of foreign bank + ringfencing of obligation of foreign entity 47. Umbrella / Unified Registration Framework Suggestions: Each activity combination under the umbrella licence can beS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications We suggest that the mapped to one category, with umbrella registration clear should: capital and risk management Recognise a set of expectations. This provides regulated activity predictability for investors and modules such as boards dealing in securities / while allowing flexibility for derivatives (broking business design. and/or proprietary), Clearing member functions, Depository participant services, Custody services, Distribution and/or investment advisory, Investment banking (ECM/DCM), Credit rating Advisory or ERDPP-type activities, as applicable. Define fee: Consolidated fees, reporting and inspections: Suggested to consider cappingS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications or discounting regulatory fees where multiple activities are housed in the same legal entity under one umbrella registration. Categories (similar to DFSA/ADGM) Category A: Trading and clearing firms (higher capital, more intensive risk systems). Category B: Agency broking and custody firms. Etc Conflict of interest: Where multiple functions such as proprietary trading, client broking, custody, clearing and distribution are combined in a singleS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications entity, we recommend a specific requirement that the entity maintains a conflicts- of-interest framework, this ensures that the flexibility of common PO/CO does not compromise investor protection. 48. Clause A PO to be located in IFSCA If the ERDPP is 1. ERDPP is all together a new 4(1) opening only a Branch category and currently does not Consultation Office in IFSCA, it can have adequate business in IFSCA, paper on locate Principal Officer making it premature to place an amendments in IFSCA from April expensive resource in IFSCA in to the IFSCA 2027 onwards (FY28). case of ERDPP, especially if it is (Capital opening up a Branch Office in Market IFSCA. Intermediari es) 2. IFSCA is requested to assist new Regulations, Intermediaries to set up business 2025 by promoting an environment which is conducive for Ease of doing business.S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 49. Clause E (32) Umbrella Registration: 1. We propose that the Must-Have Services for of Services that can also be permitted Authority consider Sustainable Finance Consultation appending to the 1. All Organisations seeking paper on permissible activities Sustainable Finance borrowings amendments for ERDPPs the or any Bank mandated to Lend to the IFSCA provision of key Sustainable Finance, both would (Capital sustainability services need to seek these Services for Market required under themselves or for their Clients. Intermediari Sustainable Finance Enabling ERDPPs to undertake es) frameworks, including both ESG rating and sustainability Regulations, but not limited to services will allow such entities, 2025 GHG/Carbon Footprint where eligible, to consolidate Assessments, ESG and related activities under the Materiality proposed umbrella registration Assessments, framework, thereby improving Sustainability and ESG regulatory efficiency and reducing Reporting, operational duplication. ESG/Sustainability 2. As Green, Social and Roadmaps, Life Cycle Sustainability-Linked Bonds are Assessments (LCA), key instruments of sustainable Decarbonisation finance, SEBI’s June 2025 Planning, Emission framework formally authorises Reduction Strategies, accredited ESG Rating Providers and preparation of to act as independent third-party GHG Inventory reviewers/certifiers for such Frameworks. issuances. This recognitionS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications ensures credible ESG validation, reduces greenwashing risk, and 2. As a SEBI-accredited provides the independence and ESG Rating Provider, expertise necessary for robust we are also accredited assurance, thereby strengthening to serve as an market integrity and investor Independent confidence in sustainable finance Reviewers/Certifiers transactions within the IFSCA. In for Green Bonds, this context, enabling ESG Rating Sustainability-Linked Providers undertaking these Bonds and Social review and certification functions Bonds, and request to obtain approval under a unified that ERDPPs be registration structure would permitted to offer allow streamlining oversight and these services under support the expansion of high- umbrella registration. quality sustainable finance activity in the IFSCA. 50. Clause A Qualification of Principal Officer Please "Append" in the Principal Officer is going to be a 4(2) end of the paragraph - Business Leader/ owner of Consultation or is a Certified Business. paper on Independent Director With IFSCA already expanding amendments from Ministry of eligible qualifications and to the IFSCA Corporate Affairs reducing experience (Capital having passed requirements, adding the option Market mandatory test from for a Certified Independent Intermediari Indian Institute of Director (MCA–IICA) is fullyS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications es) Corporate Affairs aligned with the intent of enabling Regulations, (IICA); and competent business leaders to 2025 serve as Principal Officers. This certification reflects formal training in corporate governance, compliance oversight, and fiduciary responsibilities, skills directly relevant to effectively controlling and supervising the business. 51. 3(1)(cc) net worth is defined as follows: In reference to the definition, we seek “Net worth” means the aggregate value of the paid-up your clarification on share capital (or capital contribution) and all reserves the following point: created out of the profits, securities premium account, Whether the net worth and debit or credit balance of profit and loss account, requirement can be after deducting the aggregate value of the accumulated maintained in the form losses, deferred expenditure, and miscellaneous of liquid assets expenditure not written off, as per the balance sheet, but (Fixed does not include reserves created out of revaluation of Deposits) funded assets, write-back of depreciation, and amalgamation: through a loan obtained from our Provided that, where an entity is a broker dealer, holding company, so clearing member, or investment banker, the net worth as to ensure shall mean the aggregate value of its liquid assets. compliance with the revised definitionS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications Explanation: Liquid assets for the purpose of this clause of net worth under the shall mean cash and bank balance, fixed deposits, aforesaid regulation. Government Securities, and other instruments as may be specified by the Authority. 52 9 (8) Where an entity has multiple registrations under these We support the IFSCA’s • This flexibility aligns with the regulations, the principal officer shall be appointed/ proposal to permit a core objective of unified designated for each such registration separately: single individual to act registration thereby as Principal Officer facilitating ease of doing Provided that an entity with registration as broker (“PO”) for multiple business by removing dealer, clearing member and depository participant may activities under the duplication of roles and have the same person as principal officer for these IFSCA (Capital Market supporting integrated activities: Intermediaries) business models. Regulations, 2025 Provided further that an entity with registration as credit (“CMI Regulations”) as • Permitting a single individual rating agency and ERDPP may have the same person as this will facilitate ease to act as PO for all activities principal officer for these activities. of doing business for governed by the CMI entities operating Regulations and extending this within the IFSC. flexibility to allow the same individual to serve as PO In line with our under both the CMI recommendation to Regulations and FM extend the umbrella Regulations would alleviate registration challenges in hiring key framework to also personnel and further cover Fund enhance the ease of doing Management Entities business for entities in theS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications registered with IFSCA IFSC. This is beneficial as detailed in point 2, particularly in a developing we suggest: financial ecosystem. • One individual should be permitted to act as Principal Officer for all activities governed by the CMI Regulations, and this flexibility should be extended to allow the same individual to act as Principal Officer under both the CMI Regulations and the IFSCA (Fund Management) Regulations, 2025 (‘FM Regulations”), for entities registered with IFSCA. 53 Serial Text of the Proposal We respectfully We express our commendation Number 32, request to consider for the International Financial 33 and 34 E. Umbrella registration for CMIs extending the Services Centres Authority umbrella registration (“IFSCA”) and its forward-S. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications 32. It has been observed that many entities in IFSC are framework to also thinking approach in adopting currently holding multiple registration under the CMI cover Fund global best practices. The Regulations (such as broker-dealer, clearing member, Management Entities initiative to implement a unified depository participant, custodian, and distributor). (“FMEs”) registered registration for Capital Market During the discussions, entities have requested the with IFSCA. Intermediaries (“CMI”) is a possibility for introduction of a unified or umbrella significant step forward. registration framework for undertaking capital market activities in the IFSC. By allowing entities to operate under one registration, IFSCA is Global Best Practices fostering an environment conducive to growth and 33. It has been observed that globally, financial centres innovation. This approach such as Singapore have the mirrors the successful framework concept of such unified registration for the capital in Singapore, where the Monetary market entities. In Singapore, MAS issues a Capital Authority of Singapore (“MAS”) Markets Services (CMS) License that permits an entity to issues a Capital Markets Services carry out (“CMS”) License. This license multiple regulated activities, such as: enables entities to engage in various regulated activities, ▪ Dealing in capital markets products including dealing in capital ▪ Advising on corporate finance markets products, fund ▪ Fund management management, and providing ▪ Real estate investment trust management custodial services for securities. ▪ Product financing ▪ Providing credit rating services As GIFT City continues to develop, ▪ Providing custodial services for securities adopting a similar model for FMEsS. Regulation Text of the Regulation/Sub-regulation Comments/ Detailed Rational No. no./Sub- Suggestions/ regulation Suggested no. Modifications would be a strategic enhancement. By expanding the unified registration to include Proposal FMEs, IFSCA can create a more integrated and efficient financial Proposal 6 ecosystem, attracting global players and investments. 34. Based on the above, IFSCA is exploring the introduction of an Umbrella Registration (unified We respectfully urge IFSCA to registration) framework for Capital Market consider extending the unified Intermediaries, which would enable an entity to seek registration framework to registration for undertaking multiple activities through encompass FMEs. This expansion a single application form. This initiative will enhance would align with international ease of doing business and streamline the overall best practices and provide a registration process. competitive edge to GIFT City. It would also address potential conflicts of interest by implementing necessary safeguards, ensuring a robust and transparent regulatory environment. IFSCA Response: During the public consultation, comments were received from various stakeholders. Based on the comments, draft IFSCA (CMI) (Amendment) Regulations were suitably modified and placed before the Authority in the meeting held on December 22, 2025. The above comments/ suggestions were also placed before the Authority.