As global markets become increasingly accessible to investors in the International Financial Services Centre (IFSC), regulatory clarity and investor protection have never been more important. On November 26, 2025, the International Financial Services Centres Authority (IFSCA) issued a new circular mandating enhanced risk disclosures for investors accessing foreign markets through Global Access Providers (GAPs) and Introducing Brokers (IBs). This requirement stems from Clause 39 of IFSCA’s earlier circular titled “Regulatory Framework for Global Access in the IFSC” (issued on August 12, 2025), and aims to bring transparency, accountability, and informed decision-making to the forefront of cross-border investing.
Why This Circular Matters
Global investing opens doors to international diversification and new opportunities—but it also exposes investors to unfamiliar risks. Recognizing this, IFSCA has now prescribed a standardized “Important Notice” containing key risks and disclaimers, which GAPs and IBs must display at every client login. This ensures that investors consciously acknowledge the risks each time they access global markets.
GAPs and IBs are required to implement these enhanced disclosures no later than December 31, 2025.
What Investors Will See: The Key Risk Disclosures
The newly mandated notice, detailed in Annexure I of the circular, outlines a comprehensive list of risks that investors may face while trading or investing in foreign markets. While the list is inclusive and not exhaustive, it highlights ten critical categories:
1. Market & Interest Rate Risk
Foreign markets operate under different legal systems, market structures, trading calendars, and levels of investor protection. This can significantly impact price movements and investment outcomes.
2. Currency Risk
Exchange rate fluctuations can erode profits or magnify losses when investments are converted back to the investor’s base currency.
3. Custody Risk
Assets held with overseas brokers or custodians may be at risk if those intermediaries face insolvency or operational failures.
4. Liquidity & Settlement Risk
Different settlement cycles and market liquidity conditions may cause delays or unexpected challenges in executing or settling trades.
5. Technology, Time-Zone & Cybersecurity Risk
Trading across time zones with electronic systems introduces latency and outage risks. Cyberattacks may compromise confidential or sensitive personal information.
6. Product & Suitability Risk
Foreign financial instruments may be complex or high-risk. Investors must ensure suitability based on their financial goals, risk appetite, and investment horizon.
7. Regulatory & Legal Risk
Foreign jurisdictions have their own investor-protection rules, dispute resolution mechanisms, and compliance requirements. Sanctions or local restrictions may also apply.
8. Taxation Risk
Investments may trigger tax obligations in both India and the foreign jurisdiction. Tax rules may change without notice, and investors must ensure compliance.
9. Remittance & Regulatory Compliance Risk
All fund transfers must comply with Indian regulations including RBI’s Liberalised Remittance Scheme (LRS), as well as foreign laws.
10. Social & Political Risk
Political instability or social developments abroad can heavily influence international markets and investment valuations.
Investor Consent Is Mandatory
Before accessing global markets, investors must actively acknowledge these risks by clicking “I Agree”—affirming that they have read, understood, and accepted the terms.
A Step Toward Safer Global Investing
IFSCA’s latest directive strengthens the governance framework around global market access and reinforces its commitment to investor protection. By ensuring that risks are clearly communicated upfront—and repeatedly—investors are empowered to make better-informed decisions as they explore opportunities across international markets.