Draft Revamped Regulatory Framework for Global Access in IFSC: Key Highlights and Opportunities

The International Financial Services Centres Authority (IFSCA) has released a landmark Consultation Paper on the Draft Revamped Regulatory Framework for Global Access in the IFSC, inviting public comments by May 19, 2025. This revamped framework aims to redefine how Indian and foreign investors can seamlessly access global financial markets through IFSC, especially GIFT City.

What is Global Access in IFSC?

Global Access in IFSC refers to the regulatory facilitation that enables broker dealers and market intermediaries operating in IFSC to provide clients with access to stock exchanges and financial products in foreign jurisdictions. This initiative is intended to integrate Indian capital markets with the global investment ecosystem while ensuring regulatory oversight and investor protection.

Why the Revamp?

The revamp is driven by the increasing demand for cross-border investment options, the need to align with global best practices, regulatory enhancements based on experience and stakeholder inputs, and SEBI’s recent circular (May 2, 2025) permitting SEBI-registered stock brokers to establish Separate Business Units (SBU) in IFSC for global market activities.

Key Features of the Proposed Framework:

1. Registration of Global Access Providers: Entities must register with IFSCA and maintain a minimum net worth of USD 1 million. Foreign broker-dealer subsidiaries already operating in IFSC may be deemed registered.

2. Broker Dealer Participation: Broker dealers aiming only for global market access (without local trading) must register through a Global Access Provider and maintain a net worth of at least USD 200,000.

3. Client Eligibility: Access is granted to resident Indians (via LRS route under FEMA regulations), non-residents in IFSC, and non-residents from foreign jurisdictions.

4. Permitted Products: Access is restricted to products defined as "financial products/services" under IFSC laws. Crypto-assets and INR pair currency derivatives are explicitly prohibited.

5. Disclosure & Compliance: Extensive obligations on KYC/AML/CFT compliance, risk disclosures to clients, segregation of client and proprietary funds, advertisement and grievance redressal norms.

6. Data Localization and Reporting: All transaction data must be stored within IFSC. Regular reporting to IFSCA is mandated.

Strategic Objectives of the Framework:

The IFSCA’s regulatory overhaul aims to position GIFT City IFSC as a global financial hub, provide Indian investors access to international markets in a regulated manner, encourage overseas investment inflows from Asia, the Middle East, and Africa, and bring currently unregulated global access platforms under the regulatory fold.

Opportunities for Market Participants:

Broker dealers can offer international market access from a low-tax, regulation-light IFSC environment. Global investors can explore Indian exchanges via structured routes. Fintechs and digital platforms can act as referral partners, expanding the distribution model.

Regulatory Fee Structure (Snapshot):

Global Access Provider: Application Fee: USD 1,000 | Registration Fee: USD 10,000 | Annual Fee: USD 10,000

Broker Dealers: Net Worth (Global Access Only): USD 200,000 | Turnover-based Fee: 0.005% (non-derivatives), 0.0001% (derivatives)

Draft consultation Paper:

Detailed Consultation paper

How to Participate?

IFSCA invites comments from stakeholders and the general public. Submit your suggestions in the prescribed format to: consultation-cfd@ifsca.gov.in, akash.boddeda@ifsca.gov.in (Assistant Manager), arjun.pd@ifsca.gov.in (General Manager). Deadline: May 19, 2025

Conclusion:

The Global Access in IFSC framework marks a pivotal step in India’s financial globalization. With IFSC acting as a regulated conduit for global capital, stakeholders—be it investors, brokers, or fintechs—stand to gain significantly from this forward-looking initiative. By participating in the consultation, market players can help shape a regulatory environment that is future-ready and globally competitive.