The International Financial Services Centres Authority (IFSCA) has released a Consultation Paper on Amendments to the IFSCA (Capital Market Intermediaries) Regulations, 2025, inviting comments and suggestions from stakeholders and the public. These amendments aim to enhance the regulatory framework, simplify compliance requirements, and promote ease of doing business for capital market intermediaries operating in the International Financial Services Centre (IFSC).
Background and Context
The IFSCA notified the Capital Market Intermediaries (CMI) Regulations, 2025 in April 2025, replacing the earlier 2021 framework. The new regulations introduced updated provisions concerning the appointment of principal and compliance officers, revised net worth requirements for key intermediaries such as broker-dealers, clearing members, and investment bankers, and set compliance timelines.
Initially, intermediaries were required to meet these revised norms by October 1, 2025. However, in response to industry representations, the compliance deadline was extended to December 31, 2025.
Key Proposed Amendments
1. Qualification and Experience Criteria for Principal and Compliance Officers
IFSCA received multiple representations highlighting challenges in finding qualified professionals with the prescribed experience, particularly given the evolving market ecosystem at GIFT IFSC. To address these issues, the following proposals have been made:
- Proposal 1: Recognize post-graduate degrees in Fintech, Science, Technology, Engineering, and Mathematics (STEM) as valid qualifications for the roles of principal and compliance officers.
- Proposal 2: Reduce the required work experience for graduates from 10 years to 5 years in the financial services sector.
These changes aim to expand the talent pool and encourage skilled professionals from emerging fields like fintech and data science to contribute to IFSC’s growth.
2. Common Principal Officer for Multiple Registrations
Currently, entities holding multiple registrations (e.g., broker-dealer, clearing member, depository participant) must appoint separate principal officers for each function. Market participants have requested greater flexibility.
- Proposal 3: Allow entities with multiple registrations, including custodians and distributors, to appoint the same individual as the principal officer for all functions.
However, for distribution activities, a separate vertical head with adequate experience must be appointed to ensure proper supervision and functional segregation.
This amendment aims to streamline management structures, reduce redundancy, and support business expansion.
3. Clarification on Liquid Net Worth Computation
Market intermediaries have sought clarity on what qualifies as liquid assets for net worth computation.
- Proposal 4: Clarify that base minimum capital and interest-free deposits with exchanges or clearing corporations will not be considered part of liquid assets.
Conversely, margins deposited by broker-dealers and clearing members will be included.
This distinction ensures consistency and aligns with prudent financial management standards.
4. Net Worth Requirements for Custodians
Comparative analysis with global jurisdictions (such as Singapore, DIFC, and SEBI’s framework) indicates varying capital thresholds between USD 1 million and USD 9 million.
- Proposal 5: Set the minimum net worth requirement for custodians at USD 1 million, with branches allowed to maintain net worth at the parent entity level while earmarking the required funds for their IFSC branch.
Existing custodians will have until January 31, 2026, to comply.
This harmonized approach promotes competitiveness while maintaining financial soundness.
5. Introduction of an Umbrella Registration Framework
In global financial centres such as Singapore, regulators issue unified licenses enabling entities to undertake multiple capital market activities under one registration.
- Proposal 6: IFSCA is exploring the introduction of an “Umbrella Registration” model that would allow capital market intermediaries to engage in multiple regulated activities (e.g., brokerage, clearing, custody, distribution) through a single application.
This initiative is expected to enhance operational efficiency, lower compliance costs, and foster an integrated business environment.
Public Consultation
The IFSCA invites comments on these proposed amendments and on the concept of umbrella registration, including potential safeguards to address conflicts of interest when an entity undertakes multiple roles.
Stakeholders may send their feedback by November 24, 2025, to:
- Shri Shubham Goyal (goyal.shubham@ifsca.gov.in)
- Shri Akash Boddeda (akash.boddeda@ifsca.gov.in)
with a copy to Shri Arjun Prasad (arjun.pd@ifsca.gov.in), mentioning the subject line:
“Comments on the Amendments to the IFSCA (Capital Market Intermediaries) (Amendment) Regulations, 2025.”
Conclusion
The proposed amendments reflect IFSCA’s commitment to developing a dynamic, flexible, and globally aligned regulatory environment at GIFT IFSC. By easing qualification norms, rationalizing net worth requirements, and exploring unified registration, the Authority aims to strengthen India’s position as a premier international financial hub, balancing innovation with investor protection and regulatory rigor.