Public Comments received on draft regulatory framework on Implementation services provided by Investment Advisers in the IFSC.

Public Comments Public comments received on consultation paper on the draft Regulatory Framework for Implementation Services provided by Investment Advisers in IFSC issued on November 13, 2025. The following comments/suggestions were received: Sr. Name and Paragraph No. Suggestions along with revised Clause in Detailed rationale along with supporting No Details of the of the Draft line with the suggestion information Person / Circular Entity 1 Mihir 5.2 For investment products and/or securities Shirgaonkar- other than financial products listed on stock Phillip exchanges in Foreign Jurisdictions, the Ventures IFSC Investment Adviser may enter into formal Pvt. Ltd arrangements or agreements with any/all of the following that are regulated in foreign jurisdictions with any financial sector regulator: a. Platforms b. Asset management companies c. financial services firms 2 Anish Gupta- 5.1 and 5.2 Suggested Revision: In major developed markets (US, UK, EU, Aionion Global We hereby propose the removal of the Australia, Singapore), laws on Capital Market mandatory routing requirements under Clauses implementation/execution services by Services IFSC 5.1 and 5.2 and recommend that Investment investment advisers are significantly more LLP Advisers shall be permitted to provide relaxed and flexible compared to the stringent implementation services through any broker- mandatory routing proposed here. dealer, platform, asset management company, or execution provider that is duly registered or • US (SEC – Investment Advisers Act 1940): regulated by a recognized financial sector RIAs routinely direct or arrange execution regulator in their respective home jurisdiction. (discretionary or non-discretionary) and must This approach enhances operational flexibility seek “best execution” across any qualified and aligns the framework with globally broker globally. No requirement to routeaccepted practices, while continuing to uphold through specific US “Global Access Providers” strong investor protection standards. Further, or domestic broker-dealers for foreign-listed implementation services would continue to be products. Affiliated brokers are allowed with strictly optional, in accordance with Regulation disclosure; client directed brokerage is 34(13), thereby preserving client choice and permitted. advisory independence. • UK (FCA – MiFID II regime): Authorised firms can combine advice with “dealing/arranging” permissions. Execution can be through any regulated global provider; focus is on best execution, unbundling of research (post-2018), and conflicts disclosure – no mandatory local routing. • Australia (ASIC – Corporations Act): AFSL holders providing advice routinely arrange execution/dealing as part of integrated services. Flexibility to use international platforms/custodians; no jurisdiction specific channelling. • Singapore (MAS): Financial advisers and dealers provide “execution-related advice” and direct trades through any regulated global counterparty, subject only to best-execution policies. • EU (MiFID II): Investment firms authorised for advice + execution can use any EEA or third-country venue/provider meeting best-execution standards. A principles-based, best-execution-driven framework, aligned with established international practices would better balance investor protection with operational flexibility, thereby enhancing the IFSC’s attractiveness as a competitive global financial centre. 5.3 Suggested Revision: Revise 5.3 to: “While Developed markets emphasize optionality but providing implementation services, the permit integrated (bundled) services with investment advisor shall ensure that such disclosures, reducing operational burdens, facility is only optional, i.e., its advisory clients which adds compliance complexity without shall not be under any obligation to avail proportional benefits. implementation services offered by the investment adviser as required under • US (SEC): Regulation 34(13) of the CMI Regulations. RIAs can bundle advice and execution (e.g., via However, to enhance ease of operations, wrap-fee programs) as long as optional, investment advisers may offer bundled disclosed, and best execution is sought. No advisory and implementation services with outright prohibition on integration; focus on clear disclosures, client consent, and no undue fiduciary duties and client choice. pressure, provided conflicts are managed through best-execution standards and • UK (FCA): transparency.” This maintains optionality while Firms can offer combined advice/execution allowing flexibility for efficient client service. under MiFID II, with optionality ensured via clear terms and no compulsion. Bundling is common with transparency on costs/conflicts. • EU (MiFID II): Allows bundled services post unbundling reforms, but with client optionality and best- execution obligations. No rigid separation if disclosed. • Australia (ASIC):AFSL holders integrate advice/execution routinely, ensuring services are optional and suitable, with lighter compliance via principles- based rules. • Singapore (MAS): Execution-related advice can be bundled, with optionality via client agreements; emphasis on fair dealing rather than strict segregation. In contrast, the IFSC’s strict optionality requirement under Regulation 34(13), without limited bundling flexibility, creates operational fragmentation that increases costs and compliance burdens for Investment Advisers. A more balanced approach allowing controlled bundling with appropriate safeguards would enhance operational efficiency. Such flexibility can be introduced without compromising investor protection or transparency standards. Note: During the public consultation, comments were received from various stakeholders. Modifications, if any, shall be suitably carried out in the circular.