Capital Market Intermediaries Get More Time for Revised Net Worth Compliance

The International Financial Services Centres Authority (IFSCA) has significantly acknowledged the reliefs needed by capital market intermediaries (CMIs) that continue to operate within GIFT City IFSC. IFSCA has granted an extension of its ‘minimum net worth maintenance’ compliance deadline, as stated under the IFSCA (CMI) Regulations, 2025, vide IFSCA Circular dated 12th September 2025. For firms dealing with the management of assets and the execution of transactions, especially those dealing with NRIs and foreign constituents for investment in India, this extension is a relief as per the regulations.  

Understanding the Regulatory Context

The IFSCA has been legislating and developing regulations to aid compliance and ease of doing business. Moreover, to encourage IFSCs to flourish and provide the needed incentives for business growth. IFSCA (Capital Market Intermediaries) Regulations, 2025, are the new capital market regulations for IFSCA, which have replaced the 2021 version and are the next step to IFSCA growth. One major component of the IFSCA (CMI) Regulations, 2025 framework is the new and, in some instances, upgraded minimum net worth requirements.  Net Worth is fundamentally the key test to measure the financial stability of an institution and its loss absorption capacity to maintain stability in the market.

Initially, the new regulations specified a clear timeline for compliance. According to the explanation under regulation 7 of the CMI Regulations, any CMI requiring an infusion of capital to meet the revised minimum net worth would have to ensure compliance by October 01, 2025. Approaching this deadline, the intermediaries were required to take quick action. For capital-ready firms involved in offering sophisticated products, such as managing large portfolios, advising on Indian real estate investment trusts, or dealing with cross-border complex instruments, this is imperative.

A Welcome Relief: The Extension

However, the IFSCA is a responsive regulator. Acting on representations from the market participants, it extended the timeline for compliance with the revised minimum net worth requirements, as expected by the IFSCA.

The revised deadline is now 31 December 2025.

This three-month extension serves as a huge win for CMIs. It gives firms a more feasible and workable substantive timeframe for completing their capital restructuring, obtaining funding, and carrying out the administrative and operational steps necessary for full compliance with the new norms. This is particularly important for newer entrants and firms in the process of GIFT City registration.  

With the circular in place, which became effective immediately, the market can now function with confidence in relation to the timeframe for the relevant regulation. 

Importance of Investment and FinTech in the IFSC 

The scope and balance of the IFSC is and will continue to be in the hands of IFSCA, as demonstrated by their growth-oriented and facilitative approach. 

1. Certainty for Cross-Border Investors: 

For global investors interested in tax-exempt investment opportunities or considering an FPI structure in the IFSC, the stability and reliability of the investment intermediaries is of utmost importance. This extension guarantees to international investors to capitalize CMIs without the stress of a tight deadline.

2. Assisting FinTech Companies in India:  

New Circulars brought out by the IFSCA directly address CMIs, but the impact extends to the wider ecosystem. Several new FinTech companies in India and those expanding internationally are setting up in GIFT City IFSC. They offer services that directly interface with CMIs. Allowing CMIs additional time to cement their capital base indirectly aids the growth and stability of the entire fintech ecosystem in the International Financial Services Centre. This remains critical to the future of innovation in fintech products for non-residents of India and overseas investors wanting to invest in India.  

3. GIFT City’s Appeal and Attractiveness:  

IFSCA’s flexible and proactive approach, evidenced by the present extension, increases the overall appeal of GIFT City IFSC. It showcases a regulator’s responsiveness to the market while upholding the value of a sound regulator. 

Important Updates for Capital Market Intermediaries  

For capital market intermediaries operating in IFSC, the message is clear: You now have a new deadline. The net worth and other requirements stipulated by CMI Regulations, 2025, must be complied with by December 31, 2025.

• Regulatory Backing: Circular Issued under Regulatory Powers Claimed by the IFSCA Act, 2019, and CMI Regulations, Circular Carries Full Legal Sanctity.

• Check the Regulations: Ensure your firm understands the revised net worth norms scoped under your category of intermediary, especially for firms whose business includes facilitating Indian real estate investments or other asset classes for foreign clients.

• Continued Focus on Capital Infusion: The requirement of capital infusion, if needed, has not been waived; only the timeline for it has altered. Firms are expected to use this time to bring in and finalize the needed capital.

This extension represents a pragmatic approach to regulation, allowing capital market intermediaries within the IFSC the operational flexibility needed to adjust to altered regulations. It reflects the determination to maintain the operational competitiveness of GIFT City IFSC as a well-regulated global financial center. For more insights and regulatory updates, follow Gift cfo.