The International Financial Services Centres Authority (IFSCA) has taken a significant step toward streamlining and standardizing regulatory processes for capital market intermediaries in the International Financial Services Centre (IFSC). On July 11, 2025, IFSCA released a Consultation Paper on Master Circulars aimed at creating a comprehensive regulatory framework for various categories of intermediaries operating in the IFSC ecosystem.
Objective of the Consultation Paper
The primary objective of this consultation paper is to seek public and stakeholder input on draft master circulars prepared for the following seven categories of capital market intermediaries:
Credit Rating Agencies
Debenture Trustees
Distributors
ESG Ratings and Data Product Providers
Investment Advisers
Investment Bankers
Research Entities
These master circulars are designed to consolidate all existing guidelines, procedures, and compliance frameworks into a single point of reference. The initiative aims to promote regulatory clarity and ease of doing business for intermediaries operating within the IFSC.
Background and Regulatory Context
The release of the consultation paper follows the recent notification of the IFSCA (Capital Market Intermediaries) Regulations, 2025 on April 11, 2025. Under Regulation 45 of these new regulations, IFSCA is empowered to issue detailed operational norms, guidelines, and clarifications via circulars to aid implementation.
By compiling these into master circulars, IFSCA is not only reducing regulatory fragmentation but also ensuring that all stakeholders have a clear, updated understanding of compliance obligations.
What the Master Circulars Cover
Each master circular addresses critical operational and governance-related aspects relevant to the respective category of intermediaries. These include:
Registration Procedures: Clear steps for application, renewal, and validity timelines.
Permissible Activities: Definitions of what services each intermediary is authorized to provide.
Code of Conduct and Governance Norms: Ethical standards, fiduciary responsibilities, and transparency requirements.
KYC, AML & CFT Compliance: Measures to prevent financial crimes in alignment with global best practices.
Outsourcing and Cybersecurity: Norms to manage risks from third-party service providers and maintain cyber resilience.
Complaint Handling and Reporting Obligations: Channels and timelines for redressal and regulatory submissions.
Surrender and Change in Control: Process for voluntary exit and acquisition or transfer of business control.
These draft circulars are annexed as follows:
Annexure A: Credit Rating Agencies
Annexure B: Debenture Trustees
Annexure C: Distributors
Annexure D: ESG Ratings and Data Product Providers
Annexure E: Investment Advisers
Annexure F: Investment Bankers
Annexure G: Research Entities
Public Participation Encouraged
Stakeholders and members of the public are encouraged to review the draft circulars and submit comments or suggestions by July 21, 2025. Inputs can be emailed to consultationcfd@ifsca.gov.in and copied to Shri Arjun Prasad (arjun.pd@ifsca.gov.in), with the subject line: “Comments on Master Circulars for Capital Market Intermediaries in the IFSC.”
IFSCA has provided a standard format for comments, which includes clause-wise feedback, suggested modifications, and rationale—fostering structured and actionable input from the industry.
A Step Toward Global Best Practices
Through these master circulars, IFSCA is not only aligning IFSC’s regulatory architecture with international standards but also enhancing transparency, predictability, and operational efficiency. This marks a progressive move toward building a globally competitive and well-regulated capital market environment in India’s IFSC at GIFT City.